You’ve understood correctly that all the planets are level with each other. They all move in circles (orbits) around the sun. There are two sides to that circle, one of which you could say is “above” and one is “below”.
So how to decide which way is “up”? We use the direction of rotation. When you look from above, the planets should rotate anticlockwise. (This is also known as the right hand rule.) Using the North/South poles of the sun’s magnetic field wouldn’t work so well, because they flip every 11 years.
If you look “up” or “down” you won’t see any objects from our solar system, but you can see many things that are outside it. Stars within our galaxy (the milky way) are mostly aligned in a stripe across the sky. Galaxies that are further away contain many more stars, but each galaxy appears as just a single point of light. As far as I understand, galaxies are randomly distributed in all directions.
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