Find my iPhone

Do what you wish. Remember, almost no responses here come from Apple employees, just users like you. We don't have access to anything more than you do. If you want to see if Apple can tell you anything about this then Contact - Official Apple Support --> https://support.apple.com/contact

Some of that could be the result of location sharing and Find My Network.

Set up Find My on your iPhone, Mac, AirPods, or other devices - https://support.apple.com/HT210400#enablefindmy

"To see your device even when it's offline, turn on Find My network. The Find My network is an encrypted, anonymous network of millions of Apple devices that can help you locate your device."

To learn how to 'Turn Location Services and GPS on or off on your iPhone, iPad, or iPod touch', click here --> https://support.apple.com/HT207092

- How to turn Location Services on or off for specific apps

Find friends and share your location with Find My - https://support.apple.com/HT210514

Realize that disabling these features could have adverse effects should you lose your device, so it's a trade-off.

I don't know what "background activity" means other than guessing at face value of the words. Apparently even if you deactivate the service the app still runs. I don't know if it interfaces with other apps for some reason. If you want to know the answer then you'll have to contact Apple and ask to speak with software engineering.