Family Icloud

Yes.

iCloud storage sharing specifically requires different Apple IDs for each person. When the storage plan is purchased, all members of the Family Group have access to it automatically, you don't actually have to migrate anything. And no, accounts are not merged, and you cannot access other peoples files and photos directly.

Also, purchases don't actually take up space in iCloud.

See here: link-> Share an iCloud storage plan with your family - Apple Support

Once you invite their existing Apple ID to join Family Sharing and they accept, their prior purchases should be available to other family members.

That is correct if you use the last link in Phil's post.