This is the 13869th most frequent Russian word.
облаками
"Облаками" means "by the clouds" or "with clouds" (instrumental plural of "облако").
In this sentence, 'облаками' is in the instrumental plural form of 'облако', indicating the means or accompaniment involved in the action.
Не могу налюбоваться красивыми облаками в небе.
I can't stop admiring the beautiful clouds in the sky.
Here, 'облаками' is also in the instrumental plural form and illustrates the surrounding setting of the hills.
Мы гуляли по холмам, окружённым облаками.
We walked through hills surrounded by clouds.
In this example, 'облаками' shows location or relationship by indicating where the action of flying is taking place, rendered through the instrumental case in plural.