Cleric seen on lake in daydream (7)
I believe the answer is:
reverie
'daydream' is the definition.
(I know that daydream can be written as reverie)
'cleric seen on lake' is the wordplay.
'cleric' becomes 'Rev' (abbreviation for Reverend).
'seen on' means one lot of letters go next to another.
'lake' becomes 'erie' (Lake Erie is one of the Canadian/US 'Great Lakes').
'rev'+'erie'='REVERIE'
'in' acts as a link.
(Other definitions for reverie that I've seen before include "A day dream; a word used in the first ever 2 dn" , "Daydream, meditation" , "A waking dream" , "Daydream or preoccupation" , "Brown study" .)