Downsizing 256GB to 128GB with 2TB iCloud

Hey guys!

I've got an iphone XS 256gb, with a 2TB icloud storage.

On checking device storage, i've only used 70gb/256gb because most photos are in icloud.

I just did a full backup onto my computer and "restore from backup", and it was a whopping 160gb on iphone storage (before icloud begin backing up- which should bring the number down to 70gb).

My question:

I'm looking to get a 128gb iphone 13 and continue with the 2TB icloud storage.

1) When i get the 128gb phone, can i still view my photos (likely lower res optimized storage setting) on this phone, given that total phone usage with icloud is 70gb?

2) I believe i won't be able to do a restore from computer (since its 160gb), so i have to utilise the restore from icloud function?

Thanks in advance!