iphone 7 not enough space in icloud

my iphone 7 tells me not enough space to backup photos to icloud even though i have almost half of storage space available. I have removed all but 35 photos from my phone but it says I still have 146 !???? I considered turning off icloud photo library but I don't have enough space available on phone for all the icloud photos. Will I lose all the photos if I don't download them to my phone?!! Same issue if I sign out. Message says all photos, documents, etc will be permanently deleted. I'm so frustrated at this point I want to get rid of iphone completely. And I have tried turning phone off/on and turning wifi off/on.