Can I use my iPad whilst backing up? Back time remaining says 28 hours!

It should not take that long. A backup can take several hours depending on its size & your internet speed. The estimated backup time can also fluctuate depending on your connection to the server. Do you have a stable internet connection? Try stopping the backup & restarting.

This explains the iCloud backup.

iCloud: iCloud storage and backup overview

And this gives you overview of how to manage storage:

Manage your iCloud storage - Apple Support

Yes, you can setup your new device from a backup as long as its iOS is the same or later than the device you're restoring from:

iCloud: Restore or set up your iOS device from iCloud

If you have a computer, you could also backup to iTunes

Should I use iTunes or iCloud to back up my iPhone, iPad, or iPod touch? - Apple Support

If you are backing up your iPad with iCloud and not iTunes, you should be able to use it while it is backing up.

The backup includes apps and app data when you use iCloud. All of the purchased apps and their data will download from iCloud when you restore the backup.

You're welcome.