The blob package already have tag cloud support and I guess you are using that. By default you can use the Composite.Community.Blog.TagCloud function to show the tag cloud for a specific blog - simply add it to the blogs page.
Just to get the terms fixed: The blog package in Composite C1 will let you create multiple blogs, where one blog is represented by 1 blog page - and this page has blog posts below it.
I guess you are looking for a way to aggregate all tags across multiple blogs? And selecting a tag would show all posts from all blogs which has the specified tag?