I would like to use iCloud drive for everything, but I have one glaring issue. I can not move it off the OS volume. I would like to be able to move it out to an external drive. Is this possible?
You guys are missing the point of the OP. We run SSD's and we want ALL of our GB's of files stored locally. You can't do that if Apple doesn't let you move the icloud drive folder from the system library root.... like you can with Dropbox. This KILLS the service for me. And probably most serious users.
It is not in the "system library root", it is in the Library folder in your home directory. And as Apple does let you locate your home directory anywhere you want, I think that is where you find your solution.