Just a little additional information.
The term Heaven depends on the context. For example: The Hebrew sha·ma?yim (always in the plural), which is rendered “heaven(s),” seems to have the basic sense of that which is high or lofty. (Ps 103:11;
Pr 25:3; Isa 55:9) The etymology of the Greek word for heaven (ou·ra·nos?) is uncertain.
The expression “midheaven” applies to the region within earth’s expanse of atmosphere where birds, such as the eagle, fly. (Re 8:13; 14:6; 19:17; De 4:11 [Heb., “heart of the heavens”]) Somewhat similar is the expression “between the earth and the heavens.” (1Ch 21:16; 2Sa 18:9)
The expression “heavens of the heavens” is considered to refer to the highest heavens and would embrace the complete extent of the physical heavens, however vast, since the heavens extend out from the earth in all directions.—De 10:14; Ne 9:6.
As to your question "why man assumed God was up in the sky in the first place."
In many texts, therefore, the “heavens” stand for God himself and his sovereign position. His throne is in the heavens, that is, in the spirit realm over which he also rules. (Ps 103:19-21; 2Ch 20:6; Mt 23:22; Ac 7:49) From his supreme or ultimate position, God, in effect, ‘looks down’ upon the physical heavens and earth (Ps 14:2; 102:19; 113:6), and from this lofty position also speaks, answers petitions, and renders judgment. (1Ki 8:49; Ps 2:4-6; 76:8;
As far as your statement "At the time, man did not know what was up in the sky, or in outer space," The following may prove of interest.
Some of the constellations we know today were first described in ancient Babylon. Among these are the 12 constellations representing the signs of the zodiac. These played—and still play—an important role in astrology, the divination of the supposed influence of the stars on human affairs. Looking for omens in the stars, though, is condemned in the Bible. (Deuteronomy 18:10-12) Yet, worshipers of God were aware of the existence of constellations. The Bible book of Job, for instance, speaks about God as the one “making the Ash constellation, the Kesil constellation, and the Kimah constellation.”—Job 9:9.
The names of many of the constellations that we know today are from Greek mythology. Names like Cepheus, Cassiopeia, Andromeda, and Hercules can still be found on modern-day star charts.
Finally: if Columbus had studied the Bible perhaps he could have learned something.
In proved science we see God’s written Word speaking out centuries ahead of human scientists and proving 100-percent accurate. Nearly 2,700 years ago, at a time when the so-called learned men were speculating about the earth’s being flat, God caused his word to be written: “There is One who is dwelling above the circle of the earth.” (Isa. 40:22) The prophet Isaiah had not traveled around the earth. He had not been up in a space vehicle looking down to see that the earth was round, but God, who dwells in the heavens and who created the earth, gave the truth as to its shape.