It is insude our galaxy. Open clusters are mainly in the galactic plane, globular clusters swarm around the galaxy centre like a halo. Globular clusters in our nearest neighbour galaxies can also be seen, but they appear very small, almost stellar.
Your son asks good questions. M13 is definitely outside of the galactic plane but is still part of our home galaxy. Most globular clusters are above/below the galactic plane also. Dmitri's link will bring you to a program I recently downloaded and like a lot. The inexpensive program adds a whole new dimension to what we can learn about the location of telescopic objects. -- great stuff.