Exactly prophet, I think you are spot on. It may not be JUST CoC (Clash of Clans)....but the fact it is a VERY processor intensive game and a resource hog. Think about it. Why is this ONLY happening on iPhone 4S and older phones? I think we all agree on that, right? Because they have lower RAM and slower processors than the 5 or 5S. I think iOS7 now requires more memory (just like any operating system when you upgrade), and the 4S struggles at times with processor intensive applications. The iOS panics and for some reason, iCloud gets wiped. I've been closing all applications before playing CoC but still occasionally get the problem, although not nearly as often.
Again, this is an Apple problem. Like Kassiff, I have tried almost every solution posed here (before I even joined this thread) and none of them work. Once your device's memory gets low enough to crash the OS, this issue appears.
Has eveyone gone to their settings/general/about/diagnostics & usage/diagnostics & usage data? What error logs do you see? These are the ones sent to Apple if you agree to the "send Apple diagnstic data to improve experience, etc." prompt when you first got your phone. I don't know about you guys but I see a TON of low memory logs and several CoC crashes (due to low memory I'm sure).
As for the iCloud backup issue.....you got me there. I would lean towards the DND bug. It's the only thing that makes any sense. It certainly isn't low memory. Has anyone disabled DND for a long period of time and had the iCloud password issue resolved? Would be interesting to know.
I am thinking the iCloud password request issue and the iCloud disable issue are two separate issues.