How can I use iCloud's 5 GB space with a 64 GB iPod?
A fairly good article to check out in this case is iCloud: Backup and restore overview 

You receive 5 GB per iCloud account, but you can have separate iCloud and iTunes Store accounts setup, thereby sharing music and apps, while keeping the backups apart. 

From the article:
What is backed up:

You get unlimited free storage for:

Purchased music, TV shows, apps, and books


You get 5GB of free iCloud storage for:

Photos and videos in the Camera Roll
Device settings (for example: Phone Favorites, Wallpaper, and Mail, Contacts, Calendar accounts)
App data
Home screen and app organization
Messages (iMessage, SMS, and MMS)
Ringtones