My storage is 128 gb. Why my icloud is 5 gb?

Because that is the default, free iCloud storage capacity. Higher cloud storage can be rented if required.

I don't like to use the actual iPhone's storage. I like to keep all of my data stored in iCloud, because if my old Apple device breaks, and I have to get a new one, I don't want to have to do all of the verification on the old Apple device. I have been there before. My iPhone 5c broke, and I got the iPhone 6. The screen on the iPhone 5c wasn't responding to touch, and the issue was that I saved all photos to the iPhone instead of iCloud, and so I lost all of my old stuff. I know I could've transferred it by plugging the iPhone 5c into my iMac, but for some reason I had to enter information on the iPhone, which I couldn't do. So I really think Apple should increase the free storage from 5gb to... let's say, 10gb?

Your iPhone device storage is fixed at 128 GB.

iCloud storage which is associated with each Apple ID - can be upgraded from the free 5 GB to the monthly billed 50 GB, 200 GB or 2 TB.

To know more about: iCloud https://www.apple.com/icloud/

and iPhone storage: How to check the storage on your iPhone, iPad, and iPod touch - Apple Support

Your friend is very lucky ... if it is a free upgrade to 50GB.

Most probably, he has not yet been billed, or the amount has been deducted and he has not realized it.

50 GB costs $0.99 per month.

Ask your friend to check: See your purchase history for the App Store or iTunes Store - Apple Support