I pay the .99 each month for storage. What exactly am I storing?

Do you use iCloud photo? If so, your photos are in that space. Any files in the Files App? If so, those are in your iCloud space as well. Do you sync contacts, notes, messages or calendars? If so, those are in iCloud as is your iCloud email and iCloud backups.

Anything that you access or sync across devices via your iCloud account requires iCloud storage.