My phone says that I have 200GB of storage in iCloud. Yet phone says “storage is full”

Your phone will always have the same amount of storage it came with. You have purchased space in iCloud, Apple's synching service. Check the link in blue above your name on this page for an explanation.

To create more space on the phone, you will need to delete photos, messages, apps, etc.. Be sure to save important phots and data to your computer or an external drive. This video may help...