iCloud is a syncing service, not storage. You can't free up space by moving stuff to iCloud. If you copy it to iCloud, then delete it from your phone, it will delete it from iCloud as well.
You can try to update using a computer, that method requires less storage space on your phone.
Click on this link for instructions on how to update your phone using a computer
Update iOS on iPhone - Apple Support
Here are some helpful articles that can guide you on how to free up storage space on your phone.
How to check the storage on your iPhone and iPad - Apple Support
Manage your photo and video storage - Apple Support
Clear Other storage on your iPhone or iPad - Apple Support