iOS storage isn't out of line and is normal for an iPhone 12. I have an iPhone 16 Pro Max, and iOS with all the Apple Intelligence features, is 18 GB. System Data is a collection of cache and app data, which goes up and down as the system demands. You could backup your iPhone, then restore the phone from backup, which will reduce your System Data, but it will grow again over time as that is normal. For example, if you play games you'll store a lot of game data in System Data.
The real issue is that a phone with 64 GB just isn't enough memory anymore. Apple doesn't sell any iPhone today with less than 128GB. As technology advances, storage needs go up. The next time you buy an iPhone, make sure to buy one with enough memory to meet not just your current needs, but your future needs. I now only buy phones with 512 GB.
Again, if you want reduce system data, backup your iPhone, then restore the phone from backup.
Here is a link which will guide you --> Restore your iPhone, iPad, or iPod touch from a backup - Apple Support