In my younger days I used to fly gliders and one of the thrills was to soar in and out of clouds. Inside you can’t see the nose or wings, but out of the cloud you can see it is all FOG. Exactly like fog because it IS fog. In winter, clouds form at much lower levels, and driving over a hill you can easily drive into cloud which is seen as fog over the road. So there you are – no magic really – clouds are just fog at whatever height they have formed….
Clouds are made up of water vapour that has evaporated, floated up into the atmosphere, then condensed again so it can be seen. When enough water vapour has collected that the cloud is heavy, it will rain, which is the water all escaping and falling back down to earth (but not always in the same place it started from, as we know. Good old water cycle, eh?).