Hello Moonshine33,
Thanks for visiting the Apple Support Communities. I'm happy to help you understand iCloud and Time Machine.
1. iCloud is a syncing service to ensure everything on your devices is synced and looks the same. This article goes into more details, stating: iCloud: What is iCloud? - Apple Support
"iCloud securely stores your photos, videos, documents, music, apps, and moreâand keeps them updated across all your devices. It lets you easily share photos, calendars, locations, and more with friends and family. You can even use iCloud to help you find your device if you lose it."
2. While you can backup iOS devices with iCloud, this article talks about the different types of backups for iOS devices, and what data is backed up: About backups for iOS devices - Apple Support
3. Time Machine is an entire system backup. This article states: Back up your Mac with Time Machine - Apple Support
"You can use Time Machine, the built-in backup feature of your Mac, to automatically back up all of your files, including apps, music, photos, email, documents, and system files."
4. To restore your data, you need to restore it using Time Machine, or Migration Assistant in cases where you get a new drive or new computer, but your data can be restored.
"When you have a backup, you can restore files from your backup if the original files are ever deleted from your Mac, or the hard disk (or SSD) in your Mac is erased or replaced."
Cheers!