Q: does iCloud keychain work with chrome

It appears to only work with Safari.

Apple says that iCloud Keychain is available to third party developers on this page

http://support.apple.com/kb/HT5813

The question is therefore whether Google has or will add that capability to their browser (has: not hat I'm aware of, will: unlikely) or whether a third party extension developer has built an extension (has: not to my knowledge so far).

To summarize, I don't believe it's available today, but it may be in the future.

But strangely it says here: https://support.google.com/chrome/answer/95606?hl=en that chrome uses Keychain on the mac.

"These passwords are stored in the same system that contains your saved passwords from other browsers. On a Mac, Google Chrome uses the Keychain Access to store your login information."

This calls for a test.

Chrome uses Mac keychain, but it uses default keychain instead of iCloud keychain

What does that mean exactly? What's 'default keychain' vs icloud keychain?

There are a number of different keychains within the Keychain application on mac os x. Only the iCloud keychain is synchronised between devices. Chrome currently stores its passwords in the default keychain, not the icloud keychain, meaning that passwords are not synchronised between devices using Apple's password sync functionality (icloud keychain). Instead, they are synched between devices using Google's functionality, which essentially is achieved when you sign into a Chrome browser on another device.

It has been my experience that Apple things and Google things are sometimes not a good combination.

Note:  As of Chrome version 45, the built-in Chrome password manager is no longer integrated with Keychain