Re: I want to set up my iCloud Drive to store files just in the cloud and not on my local hard drive.
Am no expert in this area, yet your post to the community deserves some response.
Seems iCloud is mainly a sync. service, so that files are available across all trusted devices.
Files are generally stored locally in sync. with icloud.
Files can often be stored on an external storage device ...zip drive / hard drive, etc., if not required on Mac.
See: How to back up your Mac - Apple Support or files can just be drag & dropped to an external drive.
Connect and use other storage devices with Mac - Apple Support
If needed: Backup disks you can use with Time Machine - Apple Support
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Re: Manage storage recommendations not showing in iOS 15.2 (MacBook air)
Wondering if updating to the newest macOS might help:
What's new in the updates for macOS Sequoia - Apple Support says macOS Sequoia 15.4
If updating: Please remember it is always wise to back-up your Mac first
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Else:
More info. / support / contact options are available : eg website: MacBook Air - Official Apple Support