There seems to be some confusion as to what iCloud actually backsup. As mentioned, iCloud doesn't backup the actual app. It backs up the apps data. Your apps are always "saved" in iTunes so they don't have to be backed up. You will always have access to them even if you delete them from your device and never do a backup of any sort. But if you don't backup then all of your data from those apps will be lost if you need to restore them. Same for any other iTunes purchases.
https://support.apple.com/kb/PH12519?locale=en_US&viewlocale=en_US
All correct, your apps don't back up, but the data within the app does. None of your iTunes purchases do. ( music, movies, video, TV shows, etc ) But your settings,which remember what was on your phone do back up.
From experience, any free music downloads do not backup or save and can't be transferred from one phone to another.
Before you buy more storage, go through settings, iCloud storage and determine if you need more.
Don't laugh, some people really think their iphone can increase its internal storage by purchasing more iCloud storage .
Free music downloads are transferable to different devices. They are permanently in your iTunes library just like any other iTunes purchase (free or paid)
Not all free music downloads can be stored in itunes. Music downloads from free MP3 downloader apps are stored within the app and can't be moved to iTunes, or backed up.
You didn't specify that you were referring to free downloads outside of iTunes although there are ways to get free (or even purchased) downloads into iTunes that were received from elsewhere. It takes a few steps but once you get it converted you can import it in the same manner you would import your personal CD collection. It's "old school" since many don't seem to remember how to work with physical discs lol. But the option exists. Not the point though...as outside, non iTunes downloaded music won't be saved except for on a physical iTunes library (your computer for example, not your device).
I remember recording FM to Cassette then to CD then to PC and converting to MP3. Or going straight from stereo to PC sound card and making a WAV an MP3. Yep.
I Didn't, and yes, other music that can be added to iTunes can be backed up. I have a lot from CDs in my iTunes account.
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