Learn Italian: Mentre guardavo un lampo nel cielo, ho sentito un forte tuono. - While I was watching a flash of lightning in the sky, I heard loud thunder.

This sentence shows a classic time relationship! Mentre means while, which sets up an ongoing background action. For that, we use the imperfetto tense (guardavo for I was watching). The sudden event that happens during that background action takes the passato prossimo (ho sentito for I heard).

Could I use quando instead of mentre in this sentence?

You could, but it changes how the sentence is built. Mentre strictly means while and pairs perfectly with the ongoing action (Mentre guardavo). If you use quando (when), it sounds more natural to pair it with the sudden interrupting action instead: Guardavo un lampo nel cielo, quando ho sentito un forte tuono (I was watching a flash of lightning in the sky, when I heard loud thunder).

Why is it nel cielo instead of just in cielo?

Nel is the combined form of the preposition in and the article il (in the). While in cielo is a very common fixed phrase in Italian (like saying up in the sky), using nel cielo is just a bit more specific and points to the physical space of the sky where the lightning appeared. Both are perfectly correct here!

Why does the adjective forte come before the noun tuono?