Julian, you're correct. It's strange that this combo updater refuses to install. I have now solved the problem by reverting to 10.7 (see, I did have a backup and there was no need to wipe my hard drive) and then performing the combo update. A bit of a roundabout way of doing things, but it has worked and iCloud functions correctly now.
In the meantime, I have noticed others threads here in the Discussions which also mention not seeing iCloud in the System Preferences, so perhaps this will be of aid to other people.
Solved.