Solution 1:

Your iCloud storage is how much data you can keep online, in the cloud.
This is variable, depending on how much you pay, for what you need. Your first 5GB is free.

The iPhone itself has a fixed hardware memory, or space, which can only be chosen when you buy it, in 8, 16, 32, 64, 128, or 256 GB configurations.
The total you see in Settings > General > Storage will never be quite this figure, as some of that is needed for the formatting of the memory & the data structure itself.
This memory is where it stores all apps, music, documents etc that your phone can use.

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