Other occupying GB's worth of space on Macbook

Which system version is installed on your Mac?

The "Other" storage are working copies created by the system or applications, where the size may vary. This storage cannot be managed by you, only the system and applications are handling it in the background.

See: See used and available storage space on your Mac - Apple Support

"

• Other: Contains files that don’t fall into the categories listed here. This category primarily includes files and data used by the system, such as log files, caches, VM files and other runtime system resources. Also included are temporary files, fonts, app support files and plug-ins. You can't manage the contents of this category. The contents are managed by macOS, and the category varies in size depending on the current state of your Mac."

As to the other users using storage - did you ever restore your Mac using Migration Assistant? This may have created additional user account. Are you seeing more than one user, when you look at the folder "Users" at the top level of your system volume? Do the "System Preferences > Users & Groups" show more users on your Mac?

As to iCloud Drive:

You wrote "When I have purchased extra storage on iCloud, my sense was that whatever I store in iCloud at least will NOT occupy space on my local machine. But that is clearly not the case as can again be seen from the screen shot below. The iCloud Drive is occupying 10.8 Gigs. Isn't this ridiculous?"

This is intentional. The primary purpose of iCloud is to keep the data and documents on all devices identical and in sync. It is a syncing service. Your documents and data will upload to iCloud and iCloud will be keeping the master copy of your documents and data. Whenever you work with your documents and data on one of your devices, the changes will sync to iCloud and be updated, and then sync back to your other devices.

You can use iCloud to save storage, but you will still need some storage for the local copies. With "Optimise Mac Storage" enabled, iCloud will remove local copies of older files automatically, that you have not used in a long time, when your Mac is low on storage. But to save repeated downloads, iCloud will not remove items needlessly, only when the storage on your device is getting low.

On macOS 10.15 or macOS 11 you can select files or folders on iCloud Drive, ctrl-click them or right-click them and use the command "Remove Download". This way you can tell iCloud which files and folders you do not need on your Mac, only in iCloud.