IPhone storage shows 53 gb out of 128gb. So There is no issues on that front.
In the Cloud, I only have "passwords" and "contacts" backed up - that's a whopping 12.3mb. My photos I transfer to the MacBook Pro and then to an external HD. Apparently what it is doing is sensing all the other "stuff" on my phone and telling me I don't have enough space to back up the device. Even though a vast majority of backups are turned off (radio buttons and all), when I select "backup this phone" it sys it's unable to back up the phone. I'm fairly certain that the phone is being polled for it's complete content regardless of what I selected not to back up. Hence, the "hey, you need to buy more space" message. I just want to get rid of this constant, every other day reminder that I need to purchase more space. It's annoying and it's getting old.
Also the "Software Update" notice is a Pain. I'd love to get rid of that. I'm happy (somewhat) with 18.0.1. I do not want to upgrade, nor need, "Apple Intelligence". Wish I could stop that reminder also.