Literary / formal — used to describe great crowds, especially in fixed collocations like 美女如云 (beauties as numerous as clouds), 高手如云 (experts as numerous as clouds), 观众如云. Carries an admiring or awed tone, not a neutral one.
memory
Picture a sky packed wall-to-wall with clouds — that visual density is the point. The same metaphor pattern appears in 挥汗如雨 ("sweat like rain"), 川流不息 ("flow like a river"). 如 = "like", and many idioms use 如 + nature image for sheer scale.