This is what I'm wondering. Does Skim (the example used) actually store the annotations inside of the original document in a standard fashion or is it stored in

This is what I'm wondering. Does Skim (the example used) actually store the annotations inside of the original document in a standard fashion or is it stored in some kind of additional file or as a standard xattr. If the latter is the case, then the OP needs to check to see if High Sierra is using APFS or HFS because High Sierra should have automatically converted the filesystem to APFS which has xattr support natively while Sierra, by default, would still have used HFS+ which stores xattrs in the B*-tree and not in the standard metadata for the file. Since iCloud would only sync over filesystem supported metadata, the xattrs would be dropped by Sierra. This is like complaining that a file created in Windows 95 called FileWithAReallyLongName.doc would be truncated when saved in MS-DOS as FILEWI~1.DOC.