Is the icloud drive taking up storage space on my mac pro computer?

The default setting of iCloud Drive is to keep a local copy on your computer (accessed via Finder "Go" menu > iCloud Drive or via iCloud Drive in the Finder sidebar.

You can potentially reduce the local storage as described below from Add your Desktop and Documents files to iCloud Drive - Apple Support

(note that this is applicable whether or not you have the Desktop & Documents option turned on)

If you need more space on your device, iCloud Drive can help. On your Mac, choose Apple menu  > System Preferences. Click Apple ID, then click iCloud. On macOS Mojave or earlier, choose Apple menu  > System Preferences, then click iCloud. Turn on Optimize Mac Storage. Then your Mac keeps all of your recent files on your computer, but keeps your older ones only in iCloud, ready for you to download when you need them again.

I have a 2 TB iCloud storage plan and a 500 GB HD on my MacBook which is now full. I can't upload any files to my iCloud. I get the 'not enough disk space to copy' error.

I have checked the Optimise Mac Storage option which states, "The full contents of iCloud will be stored on this Mac if you have enough space. Older documents will be stored only in iCloud when space is needed.

It's filled my HD with older files I never use. I just want to store them in iCloud. Now I can't use either.

How do I transfer files to iCloud only? Uncheck the Optimise Mac Storage box?

Ideally, I'd only want to sync one folder in my iCloud with my Mac. Ever.

Is this possible?

I hope so, as I've just migrated from Google File Stream which does this seamlessly, on advice from Apple support.

Any help much appreciated.

Thanks