Sharing iCloud Photos

I have 200 GB of iCloud storage. I also have 100 GB of Google Photos storage. I want all my photos on one platform, preferably iCloud, to share with family members. I know the difference between iCloud storage and iPhone storage, but what I donb't understand is if my iPhone has 128 GB of storage what good is it purchasing 2 TB of iCloud storage since iCloud photos store on your phones storage too, no? And if i was to store photos on the iCloud drive you can't see the photo thumbb nail unless it is downloaded on your phone, too.

I'm just wondering if I'm missing something or if I am correct and I have to find another option, which would be disappointing.

Thanks in advance.