The iCloud security overview [1] says iCloud backups are encrypted "in transit" and "on server", but indeed doesn't say much about the encryption keys. There is "end-to-end encryption" on just a few items (iCloud keychain, WiFi passwords, etc.)
If Apple splits up the server into a web server and a storage server, then uses "encrypted on the server" to refer only to the storage server, that is entirely disingenuous.
Encryption at rest doesn't protect users from the company, since the company has the decryption key. It protects your data if the company misplaces the storage drive.
It's common in corporate environments to check compliance boxes, which is why AWS offers encryption at rest:
https://aws.amazon.com/blogs/aws/new-amazon-s3-server-side-e...