Is it possible to use iCloud drive like Dropbox? What I want to do is create a symbolic link to Desktop, Documents and perhaps my Downloads folder in iCloud Drive, similar to how I'd do it in Dropbox. I don't want to use the 'Desktop and Documents' setting in iCloud. It does some weird stuff with my Desktop and Documents folder locally.
Apple has a built-in setting to do basically exactly what you want. It's not technically a symlink, but it accomplishes the same functionality. It also gracefully handles different desktops on different machines. And it all works as expected in the Files app on iOS:
Yes, it's entirely possible.
You can create a directory in
~/Library/Mobile\ Documents and then symlink that wherever you like.