Why do some aircraft have wings above the fuselage, while others have them below?

It's all a matter of design, and what the airplane is designed for. Putting the wings below the fuselage (like airliners) makes a cabin where the wing carry-through structure doesn't take up space from the passengers. Airliners also operate almost exclusively from nice clean runways, so having the engines closer to the ground while taking off/landing/taxiing isn't that much of a problem. It also makes servicing the engines much easier, and makes for a landing gear that can be wider (and more stable) and retract, at least in part, into the wings.

Military transports typically have high wings, mounted above the fuselage. On all but the largest, the wing carry-through structure intrudes into the cabin, but it does locate the engines higher above the ground, reducing the chance that the engines might be damaged by gravel, stones, or other debris. It does make it so the landing gear can be shorter (in fact many military transports have the capability to 'kneel', lowering the airplane further) to make loading/unloading easier.

As for small general aviation (GA) aircraft, it's just the designers' choice. From my own experience, low wing GA aircraft tend to feel more stable on the ground, and high wings (like Cessnas) feel sort of 'wobbly', but in the air they both fly just fine. Downward visibility is much better in a high wing, but that's about it.

High wings vs. low wings; the discussion will never finish! ;-) It is a matter of design and personal choice. I own and fly a little high wing, tail-dragger aircraft. My choice was based on safety in case of emergency landing in a field. Often nose wheels brake on the rough ground. The aircraft pitchpoles and land upside down. If you aircraft has low wings, it will rest on the canopy that will most likely break. What hits the ground then is ... your head.

A tail-dragger won't pitchpole so easily because the center of gravity is behind the main wheels. If it does, the wings and the fuselage between them will work as a cage around pilot and passenger, to protect them.

Otherwise, the high wing hides what's above and the low wing, what's under. Turning final for landing with a high wing hides a bit the runway. Low wings hide the ground when sightseeing.

For larger and military aircraft, my father flew both the Dakota (low wings) and Flying Boxcar (high wings) and loved them both.

If you are thinking about military transport, the reason for high wing is to provide adequate engine clearance with very short landing gear, which in turn allow for a low height of the fuselage floor, which is better for loading and unloading.

Edit: for the record, high wing position increases the dihedral effect, which is also increased by sweepback. Since sweepback is desirable to delay the onset of Mach drag rise, you will often see high wing aircraft have anhedral (i.e. the tip of the wings being lower than at the root) to compensate for an overly stable configuration that would make the plane hard to maneuver.

Military transports are expected to be able perform their function on unimproved forward airstrips. A high wing design provides more clearance for the engines, keeping them from ingesting debris. It also means that the load floor can be very low, so cargo can be loaded using built in ramps without using additional equipment on the ground.

The problem with that type of design is that it is heavier: on a low wing plane, the landing gear attaches to the wing spar, which is already strong enough to hold the entire plane.

On a high wing plane, ether the landing gear would have to be very long to mount on the wing, or you have to build an additional area that is capable of taking the load. Ether way adds weight, and on a commercial aircraft, weight is money.

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some basic ones...

high wing aircraft:

-avoids fod..force of down draught

-more room for ground equiptment and people to move around

-better view

-more ground clearance for the engines

low wing aircraft:

-easier to access for maintenance and refueling

-can be used to step out onto for overwing exits

-easier to stick the main gear on

-don't block any of the cabin