Unfortunately, I only know the basics about iCloud since I do not use it at all, so you will need to wait for someone else to chime in. And, again, not being all that familiar with it, I do not believe that it "weeds out" old files, but I could be mistaken. I do not use it because I like my (real) backups on external hard drives I can control and I would not trust my personal information/data to some nameless online server which can be hacked into.
And, as far as I know, if you delete an item from your Mac, it will also be deleted from the cloud. So, you best check to make sure. Choose a file you don't really need and that is being synced to iCloud. Delete it from your Mac. Restart the Mac and check your cloud to see if it is still there.
And, never ever let your storage space on your device get full; the disk not only contains storage space, it also has your OS, system files and all of your files on it. The OS need plenty of empty space to function properly - always have an absolute minimum of 15 - 20 GB of empty space at all times. If you fill it up completely, the computer will simply stop functioning and it will be very difficult to deal with it then.