Hi aaronoafc,
Welcome to Apple Support Communities. I understand that you'd like to free up some space on your Mac and you'd like to know about the Photos and iPhoto libraries you see, how they work with iCloud and if you can remove them from your Mac. I can see why you'd reach out for information about this; I'd like to help. Regarding the 2 files you see for pictures; your Photos library file is likely the most recent iteration of your Photos library and the iPhoto file is likely a previous version of your library that has may or may not have been migrated to Photos. I'd suggest opening iPhoto and Photos to verify that the pictures from iPhoto are included with your Photos library. If so, you should be able to remove the iPhoto file without causing data loss.
If the photos from your iPhoto file have not been included with your current Photos library you can move them to your current library by manually importing them or dragging and dropping specific files from iPhoto to Photos. Once you've verified all your photos are in one library, you can remove the iPhoto library to conserve some space on your Mac.
Regarding the larger library file and using iCloud Photos, you wouldn't want to remove this file as it would remove the photos from iCloud as well. Check out the information below regarding how storage is used on your device and iCloud:
iCloud Photos automatically keeps every photo and video you take in iCloud, so you can access your library from any device, anytime you want. Any changes you make to your collection on one device, change on your other devices too.
The photos and videos that you keep in iCloud Photos use your iCloud storage and your device storage. And as long as you have enough space in iCloud and on your device, you can store as many photos and videos as you like.
If you turn on Optimize Storage, iCloud Photos automatically manages the size of your library on your device. Your original photos and videos are stored in iCloud and space-saving versions are kept on your device. Your library is optimized only when you need space, starting with the photos and videos you access least. You can download the original photos and videos over Wi-Fi or cellular when you need them. You can use Optimize Storage on your iPhone, iPad, iPod touch, and Mac.
If you turn on Download Originals, iCloud Photos keeps your original, full-resolution photos and videos in iCloud and on your device.
When you turn on iCloud Photos, your photos and videos automatically upload to iCloud. They're not duplicated in your iCloud backup, so you should keep backup copies of your library. You can download your photos and videos from iCloud.com to your computer and store them as a separate library, transfer them to another computer with Image Capture or Photos, or store them on a separate drive.
If you're on a device with iOS 11 or later or macOS High Sierra or later, the photos and videos you take are in HEIF and HEVC format. These formats use less storage, with the same quality."
Set up and use iCloud Photos
For more information and tips for freeing up storage, check out these resources:
Best Regards.
