Contact email set up as iCloud vs any of the other options

When you create a contact in your phone for a friend, for example, you can set up their email as 'home', 'work', 'school' etc. OR iCloud.

I cannot, for the life of me, find any clear information on what impact there is to setting up the email as iCloud.

I think I have a slight idea of what impact it has, but wanted to ask the community if there is a clear answer. Does anyone know?

And to that point, what impact does it have if I set up the phone number with or without the +1 (USA country code) and/or as an iPhone phone number. The contact specifics are getting quite muddled and confusing as of late.