Yes
Their cloud offering is fully E2EE (to the best of everybodies knowledge), so doing it à la Google Drive or OneDrive is not possible. If you can not access the unencrypted content and have/will not backdoord the encryption mechanism, yet are still being forced to implement such a scheme by a legal entity, client side is pretty much your only option.
As a side-note, IMO the company does not have a strong enough moral compass to assign the required man-hours into a project of this magnitude just out of good will. I would assume they are being forced to do so.
Do you have a source for that? I was not able to find one.
This source, for example, suggests iCloud is not fully encrypted:
https://www.reuters.com/article/us-apple-fbi-icloud-exclusiv...
I stand corrected, the vast majority is not E2EE'd. Now there unfortunately is no information about the at-rest encryption "On server". Going by the iCloud encryption debate in china [1] and the alleged security modules used [2], they probably have the keys to "Photos" iCloud. Which is consistent with the Reuters claim that "backed-up [...] encrypted services remain available to Apple employees and authorities".
[1] https://www.nytimes.com/2021/05/17/technology/apple-china-ce...
[2] https://cpl.thalesgroup.com/encryption/hardware-security-mod...