You can restore from iCloud but it isn't very convenient. You basically have to first use Settings > General > Reset > Erase all content and settings which returns your iPhone to a new empty state. You then use Setup Assistant like you did when you first got your iPhone. When you reach the restore point you can select the iCloud backup you want. Note that only iTunes-purchased music and camera roll photos are in an iCloud backup so other photos & music must be restored from a computer iTunes/iPhoto source.