Uploaded files to iCloud resulting in iPhone local storage reduced dramatically

Hi, I have just uploaded 12GB of files including PDFs, text files, images, videos etc into iCloud Drive via my iMac (Yosemite). However, I noticed that my iPhone storage which initially has 10GB free was reduced to just 1GB, with iOS prompting me on low storage space on my iPhone.

I would like ask if the images and videos that were uploaded to the iCloud Drive via either iCloud.com or iMac will be downloaded automatically to my iPhone, behaving similar to uploading images to Photo app?

Also, are the documents I uploaded to iCloud Drive downloaded to my iPhone in some unknown location?

Any help is much appreciated. Thanks.