Why I can't update apps if I'm paying for storage on iCloud?
If I am paying a monthly fee for more storage, why do I get a storage full message when updating?
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That message is referring to space on the device itself, not in iCloud. You need to make room on the device itself. Take a look at this.
What's the difference between device storage and iCloud storage? - Apple Support
This should also be helpful.
How to check the storage on your iPhone, iPad, and iPod touch - Apple Support