By "Azure cloud platform" I guess you meant DXC. Then the answer is no, you can run any version you want (we have a minimum required version. Last time I check it was Commerce 8.15 something, it might be changed now). You just give the assemblies, asset files and databases and DXC team will deploy the site for you, but they don't upgrade your site to any later version. 

No, that is up to you as a developer.

The only thing they keep updated are their SaaS services like Episerver Find, Episerver Social and so on.

What version your solution are on is depending on how fast you are to upgrade.

I beg to differ http://nuget.episerver.com/en/OtherPages/Package/?packageId=EPiServer.Find.Cms ;)

Find 12.7.0 supports CMS 11 

Thanks Quan, must have missed that one :)
Great, now I can start the work on upgrading our solutions :) (and I removed that part from my comment here)