Is the tag cloud used only for viewing, adding, and deleting tags from the currently selected record? Is the tag cloud in its entirety viewable and usable as a search mechanism? Or is the expectation the side bar is the clickable list of tags? Another way of asking would be, is there a more compact way to view all the tags available to search by? In Keep It, the tag cloud is used to perform boolean searches by clicking on tags, drilling down into the file repository.
Currently, the Tag Cloud is for assigning and unassigning tags, not for searching. To search by tag, you can either use the search field (with multiple
tag: conditions if you want to require multiple tags), a smart folder, or the source list (in which case you can Command-click multiple tags to do a Boolean and).
Or, if you are already viewing a record with a tag, you can use the menu for one of the tags in the tag bar at the bottom of the window to select that tag. You can also do this from the contextual menu in the Tags window.