The priority for Real Madrid right now is the striker. Joselu is playing too badly to be a part of this team. He wastes many positions and cannot move to empty areas easily. Real's offensive line is worse than expected. So I think their first choice would be a striker. However, the Davies transfer could save a troubled area for Real. I think Ancelotti might consider adding him to the team.
Of course, Real Madrid will always prioritize to sign a new top striker as long they don't get a proper replacement for Benzema. Mbappe and Osimhen are the main target for Real Madrid, they probably won't stop if they don't sign one of the strikers. Regarding Joselu, I don't think he played too badly, he played quite well. He proved that he could score some goals so far. Although he rarely played as a starter, he still could contribute by scoring few goals. However, it is true that Joselu isn't a proper striker that Real Madrid expects. Joselu still wasted many shot attempts in many matches, specifically in the big matches. Anyway, I don't think Real Madrid attacking line is worse, they are strong enough. If they are worse, Real Madrid won't be in the top of La Liga table and played almost perfectly in UCL.
Davies transfer will be good for Real Madrid. He will strengthen Real Madrid defense. However, I don't think it is an urgent thing, Real Madrid has good number of defenders.