Yes, it’s still important to backup from time to time even if you’re using iCloud. Your database file is still stored locally on your Mac (and iOS devices). Only a sequence of change files are stored in iCloud (plus all your photos, file attachments, etc.).
Tap Forms only has access to a special folder inside the application sandbox where it can store its backups when you use the automatic backup on quit function. If you click on the Show Files button you’ll see where Tap Forms stores the backups. There’s no way right now to auto-backup to your Dropbox folder.