Am I missing somethign? Yes. A lot. Maybe.
Though I'm only really interested in my stuff. (not applications, nor System stuff/libraries, etc)
Outside of the Documents folder (which you can select for iCloud), pretty much everything else at your Home folder level is not (and cannot?) be included (aka backed up) to iCloud. As I'm learning.
Such as ...
Downloads
Dropbox Accounts/Folders
Movies
Music
Pictures
Along with any other Folder that's sitting at what I'll call your Home Folder level. Some of which might even be put there by other Apps. Dropbox being one of them.
Mac Studio/Macintosh HD/Users/Me
The reason I've been trying to find this answer, is because I want to have all my stuff in iCloud. That way, when I log into my iCloud account, whether it's on another volume on my Mac Studio (as I'm now doing) or a I want to log into my laptop, I want to make sure I have access to all my stuff.
When I added a Ventura Volume to my Mac Studio (so I could get a nice clean install of Ventura and keep my old Montery Volume which has Apps and maybe issues I'd like to leave behind) I realized a lot of stuff was missing. Which is why I started this thread.
So, now I'm making sure I no longer store stuff outside of the Documents folder. I had stuff in both Movies and Pictures folders that really didn't need to be there, so I've moved them over to the Documents folder.
Though there are some exceptions, since Apps like Final Cut Pro don't like iCloud folders. You have to store them on your Mac in order to use them in FCPX, or some external location, just not iCloud. I'll probably put them on a fast external SSD so that no matter what Volume I boot to, my FCP projects will be accessable. Including my laptop. Though you can duplicate those libraries to a folder in Documnets and you'll have an iCloud backup that you can move locally and than use it in FCPX.
This experience of having two boot volumes (not partitions) has been a great learning experience. It has led to a better managment of my stuff.
I sometimes forget that when I use the word backup, that starts a discusion on what is a backup and we wonder off the topic I was trying to discuss. Such as this thread, where people don't consider iCloud a backup of your Mac. I'm not going to suggest someone is wrong to say that iCloud is not a backup of your Mac, because it's true. iCloud is not a backup of your Mac. If you need to restore you Mac, you'll need a lot more than what's in iCloud.
Though iCloud is a great backup of stuff. And your could make the argument that is enough to restore your Mac. You can get the OS and all the Apps you use without a backup of the OS and Apps. Fresh, new installs of the OS and all your Apps can be a good thing. Just the Apps you actually use, not all those Apps you downloaded and tried out but never really use anymore. Espeically those evil Apps you can't get rid of. (looking at you Logitech crapy webcam and crapy webcam App)
It would be great if Apple also stored a list of the other stuff (everything that's not mine) in iCloud so that if I had to restore my entire Mac Apple could take care of what's not in iCloud. I think this is how things work on an iPhone. The iPhone doesn't backup up the Apps, but it knows what Apps I had and where I put them on the various home screens. You could buy a new Mac, log into your iCloud accout and then Apple could start downloading all the Apps, at least from the App Store. Apps not in the App Store could simply be placeholders in the Application folder as a reminder that I would have to download those individually. This would allow you to restore your Mac while only backing up your stuff.
I think you can make the case that turning on all the iCloud options is a pretty good backup of your stuff. And all you have to do is click off a bunch of iCloud options in System Preference. (and purchase enough iCloud stroage) I think we can make the assumption that Apple does a good job of storing our stuff. Storing it in raid systems that have some fault tolerance, regular off line backups, AC power backup, air conditioned rooms, blah blah blah.
So, yeah, iCloud is a backup. Of just your stuff. Not your Mac. And, it's an awesome backup. Of just your stuff. As long as you keep all your stuff in a place that will wind up in/on iCloud.