If you're talking the Nexus 7 2013, you're talking about one of the best tablets of its class. The 2012 model isn't too shabby either. Both models can handle PS Touch just fine. (I have a 2013.)
You can certainly export PS Touch projects as PSD files for use in Photoshop. (You'll have to get to know PS Touch's file browser but it's pretty easy.) I would suggest having an account with a service like Dropbox. That way, you can export Photoshop-compatible PSD files directly to your Dropbox account (or similar service) from within PS Touch. Remember that you can bring PSD files back into PS Touch but any layers contained therein *will* be flattened. (I imagine this was done as a failsafe measure; tablets aren't exactly desktops right now. I forgot the exact number but I l believe the layers allowed in PS Touch is 12.)
You don't have to pay for Creative Cloud per se; they'll give you a 2 GB storage account for free. Albeit not a whole lot of space, you can use this space to upload anything and import it into PS Touch without storing it on the tablet. You can also use this space to backup your PS Touch projects in the event of a tablet reset/wipe (which I would suggest as there's no other way to get them back save for exporting as PSDX files).
Remember that PS Touch, though its similar to its desktop cousin Photoshop (or even Photoshop Elements), is a bit of a different animal. There are many elements within PS Touch that exist in Photoshop but are done a bit differently in PS Touch.
Think of PS Touch as more of an extension or companion of Photoshop rather than as a replacement. It's perfect for on-the-go projects when inspiration strikes and you're not at your desktop computer.
ON EDIT: Oh, I forgot to add: 16 GB should be plenty enough space; I have the 16 GB model of the Nexus 7 and, quite frankly, my music collection takes up more space right now than my PS Touch projects do.