I think you can just upload the packages to the cloud and then use Needs to load them as normal. It works for me.

Found my Folders under Applications and Mathematica packages work. But my packages are all encoded and normally with the proper key and decoder it works, but not here as the message says: "Cannot decode encoded file; incorrect key or machine" My question: does Wolfram-Cloud not allow encoded packages??

Encoded packages should work in the Wolfram Cloud, and on seeing your question, I have successfully uploaded an encoded pacakge and loaded it with Get[filename, key].

I wonder if the package is uploaded successfully. You could try FileHash[filename, "MD5"] on both desktop and in cloud and compare the hashes to check that.

Short of that, you could post discrete steps you tried, maybe myself or someone here could spot where it's going wrong or suggest further diagnostic steps.