IPhone – New iPhone 6 bought 4 months ago still restoring from iCloud backup

So much confusion over iCloud, so little help from Apple.

iCloud was introduced as an sync service between all your Macs and iDevices. Yes, one can buy storage beyond the free 5GB ... but I'd look closely at the specifics of backing and and restore, and also give it a trial run. Too many posts on lost data and the like on Apple Discussions to think Apple's got the cloud down pat, not yet.

Backing up to your Mac, however, is solid, you've probably got more than enough free space (check that out.) In many cases, I just zip a copy of the relevant folder and drop it into ~/Users/Shared.

BUT, you really want a second location for irreplaceable things like photos. This could be on a portable USB drive, which could also serve as a clone--nothing like having a copy of your whole computer on a start-up disk. I recommend spending also a few bucks a month on off-site backups to A3, using Arq, by Haystack Software, for automatic timed backups of files that change. The restore function is easy and impeccable.

No. Erase all content and settings keeps your current iOS. As long as you don't use an iCloud backup from a device with a newer iOS version you will be fine.