Disk too full to update to big sur

The problem is that your iCloud Storage can't be used to load updates. You have to make your Macs Storage free to Download.

Check out this Article

How to free up storage space on your Mac - Apple Support

Cheers

iCloud is only a tool / method, conduit to have files Available to several devices own by the User and to Sync changes on one device to be reflected on all other devices using the same Apple ID. As such - it not intended as a Storage Device to off load tings to it. That Storage is intended to be done to an External Drive of choice.

To make space on the Internal Drive follow the Links Support Documents below >>

What is “Other” storage on a Mac, and how can I clean it out?

How to free up storage space on your Mac

See used and available storage space on your Mac

And perform the above actions.

If upgrading from macOS Sierra or later, your Mac needs 35.5GB of available storage to upgrade. If upgrading from an earlier release, your Mac needs up to 44.5GB of available storage. To upgrade from OS X Mountain Lion, first upgrade to OS X El Capitan, then upgrade to macOS Big Sur.