In the last paragraph, it says 'your temporary backup is available for 7 days before it's permanently deleted'. Does that mean that after 7 days, my data will be deleted or will everything be safe on my iPhone?
free iCloud storage
Question marked as
The data on your phone will not be deleted; only the backup is deleted. Also see: Get temporary iCloud storage when you buy a new iPhone or iPad - Apple Support
If you want to subscribe to more iCloud storage so that you have room for iCloud backups, see: Upgrade to iCloud+ - Apple Support