What is the highest star that appears above us, and why?
The answer to that question depends on the observer’s location.
Let’s imagine that Earth is a transparent glass sphere. When one stands on Earth and looks around one notices stars in every direction: just as many below the feet as exist above the head.

Notice that every point on this “Earth sphere” corresponds (in your imagination) to the position of a star. You stare directly overhead, or at the zenith, and you’ll see a specific star at the uppermost position for a moment. As the planet rotates, different stars will occupy the zenith at specific times. Only those stars whose declinations (angles north or south of the celestial equator–the projection of Earth’s equator onto the sky) equal the observer’s latitude will ever see that star pass through the zenith.
Regard Polaris, the ‘north’ star:

With a current declination of 89° 15′ 38.1″ Polaris is not exactly at the north celestial pole, but is so close that an observer at the North Pole would be hard pressed to notice the difference.
As this star is almost aligned precisely with Earth’s north pole, it will just about appear overhead from the perspective of a north pole observer. From this location, at one end of the axis, no other star will appear to occupy the zenith throughout the rotational cycle (one could find stars closer to the north celestial pole than Polaris, but let’s cheerfully neglect them because they’re not prominent.).
Now, regard the star Betelgeuse:

As its declination is about 7 degrees (7° 24′ 26″), Betelgeuse will appear to pass directly overhead from the perspective of any observer located along the 7th North parallel.
Finally, let’s look at the night sky’s brightest star, Sirius:

Sirius’ declination is almost -17 degrees (-16° 43′ 06″). Consequently, it will pass directly overhead along the 17th S parallel. This last statement makes sense as we can see that Sirius appears south of Betelgeuse and so should appear directly overhead along a parallel that is south of the 7th north parallel.
To determine where any given star will pass through the zenith, simply look up its declination. That star will pass directly overhead along the latitude which is equal to that declination.
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