Different people like to place the bar differently. Sometimes it is a matter of personal preference, sometimes it is for effect. I like the bar to ride in the area just below my traps. It isn’t bony or painful there, and there is a lot of back there to keep the bar balanced. If you are super skinny, the bar can hurt. If you are literally putting it on your shoulders, that is too high.
If you are new to squats, I suggest doing a lot of reps, with a light weight. Sets of 5 are not enough. Make sure your form is perfect, and if you start to break form you should end the set . It takes a while to get the hang of squats, and find the groove. I think you will be better off doing sets of 15, or sets of 20.
Weight training is about moving big weights, but before you can do that, you have to really teach your body the movement. This is true even with experienced lifters, when they try a new movement. I compare it to any other sport. If you are a golfer, you don’t just go out there and whack the ball, and do it different every time, but just really hard. No, the first thing you do is learn the proper stroke, and how to do it consistently. Then you can look for power after that. Same thing with weight training. You are teaching your body the movement first, and later you can go for more weight after that. You know, the neuro-muscular pathway, and all that. Make sure you can find the groove before you worry about big weights. That way, you won’t break form under a heavy load (and injure yourself), you’ll stay in the groove and complete the lift.
I’ve squatted double my bodyweight, but I started out with an empty bar. Everyone does. And I use an empty bar for the first set even now. Worry about your form, it will prevent injury. The strength will come. If you are picking your training loads based on impressing spectators, you are a dope. Sorry if this post was condescending, it’s hard to tell what your overall experience is.