What does a 'dotted-line' cloud icon in the iCloud file browser represent? What does this "dotted-line" cloud icon next to a file in the iCloud file browser mean? 



This is a plain-text file saved to iCloud from Byword, and it refuses to sync to my iPhone. But I'm having the same problem with subsequently-created files in Byword, and they don't feature this icon.
A dotted-lined iCloud icon means that it is waiting to be uploaded (or it is currently uploading). Although this KB article applies to iTunes Match, it might help you understand this icon better: http://support.apple.com/kb/TS4124

As for Byword's syncing issues, if it is not finished uploading, it won't be accessible by your iPhone. Are the subsequent documents also plain-text? This Byword support FAQ says that Byword's iOS app currently does not support RTF files (rich-text).