Can an iCloud backup be scanned for malware or virus

No, but the backup would not contain a virus or malware unless your iPhone had been jailbroken. A non-jailbroken device cannot be infected with a virus or malware.

No. It isn’t a file, it is thousands of files. And, as your iPhone can’t get a virus, there won’t be one in a backup of an iPhone.

Correct.

It must be done by someone with physical possession of the phone while it is unlocked. And there is currently no jailbreak process for iOS 14.