Does WhatsApp keep a backup copy on my iPhone? I made the mistake to get a 16Gb iPhone and now I'm running out of space pretty much all the time. If I'm trying to do a WhatsApp backup it tells me that I need 3 GB of storage. It isn't at all clear where this backup will live.

If I clear that much space, and do the backup to iCloud, will this permanently take up 3 GB on my phone's internal storage or will it just be in the iCloud?
Once you free up 3 GB on your iPhone then only you can start taking backup of your WhatsApp and it will permanently store on iCloud will not occupy phone's internal storage.