90% of a space vehicle is a compartmentalized fuel tank. The reason for this has been explained already, but briefly, the amount of continuous force needed to reach not only escape velocity from our planet, but to achieve orbit, requires a ludicrous amount of fuel. Rockets were designed the way they were to allow for the fact that these vehicles needed a way to not only carry the necessary amount of fuel required for low earth orbit or moon travel, but also a way to very easily detach those fuel tanks once they are empty, to shed weight as soon as that weight is no longer useful.
The vertical design handles all these factors, where a horizontal design would needlessly increase the difficulty factors by requiring a fundamental change in the rocket design, to factor in aerodynamics in a more significant way, which would require more fuel to handle more weight and a longer flight time before reaching escape velocity.
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