Can I cancel my iCloud account and move back to MobileMe? If yes, then how?

I'm afraid you can't: MobileMe is terminated as of 1 July.

Correct. iCloud REPLACES MobileMe. MM no longer exists.

'Replaces' is pushing it a bit - no iDisk, website hosting or some other facilities.

"Replace" is the correct term though, I would accept "Supplant" as well. The iCloud package of services Replaces (supplants) the MobileMe package of services in Apple's product line. The fact that the specific features of the package are somewhat different doesn't change that fact. They are different packages to be sure.