Learn Hardcore German: Der Himmel über der Stadt ist hell.

In German, Stadt is a feminine noun, so its nominative form is die Stadt. However, after certain prepositions that indicate location, the noun is put into the dative case. Since über (above) is used here to describe a location rather than motion, Stadt goes into the dative, where die Stadt changes to der Stadt.

Why is über used here and not auf or in?

In German, über is typically used to convey the idea of something being located above or over something else without physical contact. Auf (on top of) implies physical contact, and in (in/inside) indicates being enclosed. Since the sky is above the city without direct contact, über is correct.

Why do we say Der Himmel über der Stadt ist hell and not Der Himmel über der Stadt ist helle?

When an adjective follows a form of sein (to be), it is used in its basic, undeclined form (often called the predicative form). In this sentence, hell is a predicate adjective that describes the subject Der Himmel and does not carry an ending.

Is there a reason for the word order: Der Himmel über der Stadt ist hell?

Yes. In a typical German main clause, the finite verb (here ist) usually appears in the second position, and the subject (here Der Himmel über der Stadt) comes first. Then, the rest of the sentence (the complement hell) follows. This creates the standard word order: Subject – Verb – Complement.