Is data stored in iCloud using Key/Value accessible by users?

Okay reading deeply in the documentation it says

If your app needs to store passwords, do not use iCloud storage APIs for that. The correct API for storing and managing passwords is Keychain Services, as described in Keychain Services Reference.

I found this text here just one line before the last table :)

I also found somewhere that the user can delete his iCloud data manually which can be counted as a modification.

Also, read here, section fro "Start Fresh If Your iCloud Data Becomes Inconsistent During Development" where it says how you can clean the container. Maybe you can check what is visible inside.

It depends what type of data you are storing in the iCloud if it's sensitive then I would use keychain services approach and avoid storing sensitive information on the iCloud.

From the question it seems like you are storing the data in key-value pairs, usually, it's recommended to store preferences, settings, and simple app state and that should be ok because the user can change those, you should choose the right iCloud API for what you want to store

With iCloud the user can always delete the information it has stored as mentioned in the documentation

There may be times when a user wants to delete content from iCloud. Provide UI to help your users understand that deleting a document from iCloud removes it from the user’s iCloud account and from all of their iCloud-enabled devices. Provide users with the opportunity to confirm or cancel deletion

When you ask

Or is it private to the application?

There's an iCloud identifier in your entitlements file. If it's the same in both apps you'll be able to access the same data/documents across both the apps.

Hope that helps.