should I enable desktop & docs folder to sync in cloud?

iCloud Desktop is not a backup. It’s a sync service. Delete or corrupt in one place, delete or corrupt everywhere.

iCloud Desktop will upload files as your network permits, which can be slow for larger files, and parallel access to the files can get tangled until the files are sync’d.

External storage for Time Machine, and external storage for works in progress archives, or however you want to configure that. That external storage might be a few hard disks, or a more organized approach using a hard disk or SSD array, or it might be a network-attached storage array. Network-attached storage is particularly useful when there is more than one computer in use locally, as it can pool and share storage. And if the network attached storage also supports Time Machine, backups can reside on the shared storage.

I would never upload non-zipped logic projecst to any cloud service.

I do, also have files backed up to a separate disk via time machine. This is primarily so I can access projects, etc on desktop (a Mac Studio) and a laptop (MacBook Pro). Never had an issue.

That's up to you. I suspect that some applications don't work well with iCloud syncing as any change to a file creates an update in iCloud.

Computer, external drive, etc