How does iCloud Keychain store unsecured wifi hotspot information?
As one can see you have the "Remember Networks this computer has joined" Enabled.

When you join new network, that information is saved in the 

com.apple.airport.preferences.plist


located in SystemConfiguration folder.

Obviously iCloud gets that file.

EDIT

Since you asked a new question and want to know how iCloud does that read this. (and click on User defaults database to expand)

Designing for Key-Value Data in iCloud


  To store discrete values in iCloud for app preferences, app
  configuration, or app state, use iCloud key-value storage. Key-value
  storage is similar to the local user defaults database; but values
  that you place in key-value storage are available to every instance of
  your app on all of a user’s various devices. If one instance of your
  app changes a value, the other instances see that change and can use
  it to update their configuration.




and