alexnndrr wrote: … So my real question is, can I turn off backup for my documents and only backup the files that I actually need?
It's important to understand that iCloud is not a backup service; it's a synchronization service. If you make mistakes in editing your files, then those mistakes will be immediately copied to iCloud.
Backup means that you save files on Monday and they don't change. Then if on Tuesday you mess up the files, you can go back to Monday-- the "back" part of backup. The only "backup" that iCloud provides is if your computer gets run over by a truck, or it falls in the toilet, then, even though the files won't be accessed on the computer, then will still be at iCloud.com.
You haven't said if you have Optimize Storage turned on. Unless you're desperate for extra space, it's a bad idea, especially because you can't make actual backups to external drives if your files are not local. Optimize is great for phones.
Now, for synchronization, if you only need a small number of files synchronized, then there's no need to keep your Documents Folder or Desktop folder inside the iCloud Drive folder. Any files you put into the iCloud Folder are synchronized. iCloud Drive behaves like any other folder-- it's just that everything in there is copied to iCloud.com.
You do have the option with files in iCloud Drive to have them kept off your local drive. If you are using Optimize, then you also get the option of requiring that certain files never be removed from your computer when it' wanting to save space.
Honestly, you're using words that don't make sense with iCloud-- like "backup," and " keep some files on my iCloud all the time." For instance, do you mean keep in iCloud.com instead of local? "…on my iCloud" is confusing, since there are many things at "iCloud." I'm guessing you mean iCloud Drive, but I'm not sure if you mean the iCloud Drive on your Mac or the iCloud Drive at iCloud.com. I'm not sure what you mean by "I just want a few files in it that I don’t want to be in the cloud." Do you want files on your Mac only? If so, then that's easy-- you just don't put them in iCloud drive-- you keep them in a different folder in your User's folder.
Here's my User's folder. Some of the folders in here are provided by Apple, like Downloads, Music, and Pictures, etc.

Stuff in my User's folder can't be accessed by other users of my Mac. I have some folders in there, like DTA, that have stuff of mine that doesn't belong in the others. Perhaps you want a DocumentsNotSync folder for not synchronizing with iCloud Drive.
It's hard to be super clear in a web site post-- feel free to ask me what I mean as I've asked you!