Why wont my iphone update after purchasing additional icloud space

The iPhone physical storage is separate from iCloud storage. Additional iCloud storage will not help in installing an iOS update on your iPhone. You cannot upgrade the physical storage on your device.

About storage on your device and in iCloud - Apple Support

See the "If there's not enough space to update" section in:

Get help with over-the-air iOS updates - Apple Support

Then perhaps the "Make more space available in iCloud" section in:

Manage your iCloud storage - Apple Support

will help. If you don't see the additional storage you purchased (see the "Check to see how much iCloud storage you have" section in the above article) then try signing out of iCloud, restart your device, and then sign back into iCloud. See the "Sign out on your iPhone, iPad, or iPod touch" section in:

Sign out of iCloud on your iPhone, iPad, iPod touch, Apple TV, or Mac - Apple Support

and

Restart your iPhone, iPad, or iPod touch - Apple Support

Then see the "If an alert says that there's not enough iCloud storage" section in:

If iCloud Backup couldn’t be completed or you can’t restore - Apple Support

Are you trying to update the software? Or update your backups? iCloud is not an extension of the storage on the phone it's an extension of JUST iCloud storage. So if you're getting alerts you need more storage from the phone then that's a separate issue. What exactly is going on?