restore iMac from icloud

iCloud is not a back up system so no you cannot restore from it. Lessons to learn from your external backup.

• Use redundant backups, many users use 2 forms of backup. For example using Time Machine and creating a bootable clone from SuperDuper! or Carbon Copy Cloner on another External Hard Disk.
• Replace your external HD's every 5-6 years, all HD's die and most will last 5 years or so but after that it's anyone's guess.
• Buy high quality components, many people buy cheap Walmart quality EHDs which have a high failure rate. Spend just a few dollars more and buy quality drives such as OWC Mercury Elite Pro

All iCloud has is files and folders you put there. If active, they're in your iCloud Drive folder; no restoration required.

Are you saying you need to reinstall the OS? If so, iCloud is not the source.

Sign in on any Mac with the Apple ID you used to "store" iCloud data and it will be available in your iCloud Drive folder. Again, there is no restoration needed, it's just sitting there for you to access via your Apple ID.