I actually searched Bing for your exact quote of the error message (probably searching the forum would have gotten the same result) and found this answer (hopefully it still works!):
“That error message only shows up when your iOS device has blocked Obsidian from using iCloud. You can change the setting from iOS’s system settings app > Your Apple ID > iCloud > Make sure that “iCloud Drive” and “Obsidian” are both turned on.”
from iCloud disabled for Obsidian? - Bug graveyard - Obsidian Forum
(Note, a different reply is marked in that thread as the solution but the quote above seems to be the actual solution.)