Not everything I have is in need of that much backup, and I would like to keep my iCloud space for the important stuff.
iCloud Drive is not a backup anyway. It mirrors the synced folders on your Mac, and because the synced iCloud Drive on your Mac is always kept identical to the counterpart in iCloud you are working with the iCloud version as well as the local version at the same time. It is essentially, as if you had only one version. If you make a mistake, it will effect both the iCloud copy and the copy on your Mac and you cannot recover the older versions, unless the document type supports versioning. iCloud does not support an archival backup, that will let you back in time. You still need to use Time Machine to be able to get back in time, but Time Machine can only backup your iCloud Drive fully, if you do not use the "Optimise Mac Storage" with iCloud.
The simplest way to have only selected items in iCloud Drive would be to refrain from using the "Desktop & Documents" option for iCloud Drive., but to enable iCloud Drive in the System preferences for iCloud, so you can see it in the Finder's sidebar. Then you can selectively drag documents and data to iCloud Drive, but your Documents folder and Desktop folder will remain local.