With Apple products, you're putting your privacy entirely in Apple's hands and assuming that their executives will continue to follow the same branding and product strategy that they've been pursuing for the past few years.
That said, Apple is probably the least bad option for phone + cloud for most people. But it's sad that that's the case.
Obviously that still isn't as trustworthy as open source tools you can verify yourself, but it's a far cry better than any privacy guarantee you're getting from Google.
No. Apple regularly hands over iCloud data to government investigator. In China, Apple handed over its keys, so the Chinese government does not even need to involve Apple to get iCloud data.