Points a blue out in clouds (7)
I believe the answer is:
nebulae
'clouds' is the definition.
(I've seen this before)
'points a blue out' is the wordplay.
'points' becomes 'ne' (North and East).
'out' indicates anagramming the letters (out can mean wrong or inaccurate).
'a'+'blue'='ablue'
'ablue' is an anagram of 'bulae'.
'ne'+'bulae'='NEBULAE'
'in' acts as a link.
(Other definitions for nebulae that I've seen before include "Gas or dust clouds in space" , "Stardust" , "where stars are born" , "Bright patches in sky from distant galaxies" , "Interstellar gas clouds" .)