Hi,
DNS error means that the device is not able to resolve Mbed Cloud URL address to IP address. That normally happens when your device is running behind some network firewall and its not able to translate the URL.
Can you try to use any open WiFi hotspot to check if the device is able to resolve Cloud URL?
At the moment the FRDM K64F PC-based flashing procedure requires SD card to store the binary prior to flashing.
Please refer to FRDM OpenSDA interface.
btw, I recon your SD card size is reported as 1MB. You might want to consider updating CMSIS-DAP Interface Firmware to newer version from board page (will forward to NXP site). Update allows storing larger files to SD card, however it will not lift the K64F internal flash limitations.
As for the SD card issue, it is required to have external storage of some sort to use cloud services. That said it can be an SD Card, external SPI or I2C Flash or really anything else. Cloud client doesnt actually care about the type as long as it has a block device driver and can be used by the file system.