I won’t be able to answer your question (as I’m not an Obsidian Sync user ) but from your 2nd screenshot, I’m not sure your local vault should be located there (i.e.: iCloud Drive > Documents).
I mean, AFAIK, it’s much more than recommended to have the local vault nowhere near iCloud Drive (or any other “cloud services” for that matter).
Version history is also part of the remote vault size.
It looks like you deleted a bunch of files locally, or have at least one file that you edit a lot (through some automation)
In your Sync plan attachments are stored for 14 days in the version history, notes for one year.
The only way to remove this before that is to delete the remote vault and create a new one.
(don’t forget to create backups)