Explain why this logic is faulty.

Fact 1: Chimpnazees and humans share 98% of their DNA.
Fact 2: Both clouds and watermelons contain 98% water.

Conclusion: Since it’s obvious that watermelons aren’t anything like clouds, people can’t possibly be related to chimpanzees.

For starters, there’s a difference between “aren’t anything like” and “can’t possibly be related”.
Two things can be related without being like each other. Also, two things can be like each other without being related.
Also, (assuming your facts are true). Your conclusion is based, so far as I can tell, solely on the fact that fact that watermelons look nothing like clouds.

Also, in the case of chimps vs humans, you’re comparing DNA, where as in the case of clouds VS watermelons you’re comparing molecules. You can’t say that since these two items, both 98% water molecules don’t look alike, then these two items, with 98% identical DNA can’t be related.

The similarity in DNA is the similarity of design, the similarity in water content is a similarity in composition. Two buildings that are both made of brick may not have anything in common, but two building with very similar blueprints have a lot in common, raising the possibility that the design for one was copied to create the other.

Another example. It’s like showing someone 98 pennies in one hand and in the other hand having a dollar bill with the edge cut off and saying…"Both of my hands contain 98% of a dollar but since they don’t look anything like each other, I declare that nothing that is 98% the same is related.

I think the fallacy is that whomever came up with the argument doesn’t understand science well enough to argue about it.

I think ‘false analogy’ is the shortest description of the error, and most likely the form that could be found on a list of logical errors.

Let’s see, if take a dollar and cut off 2% of the corner and take the rest to the bank I bet they’ll give me 100 pennies, but then I could take the corner piece to another bank for 2 pennies more, I’ll be rich, bwahahaha. Or is one of my premises absurd?

Maybe it is obvious to you, but it’s not obvious to me. Watermelons are very much like clouds; they are both very wet. Even the name “watermelon” attests to its wetness. You’ve proved nothing.

It isn’t faulty logic. It isn’t logic at all.

It’s Denying the Antecedent or Affirming the consequent.

  1. If two things are related, they are 98% alike.
  2. Clouds and watermelons are 98% alike.
  3. They are related.

This is AtC, which has the following form:

If P, then Q.
Therefore, P.

The idea would be that since #3 is obviously false, that #1 must be false as well. But as you know, this is logically fallacious. #3 doesn’t follow from 1 and 2. There is more than one way that something can be 98% alike. Q could have been caused by A, B, or C as well as P, for example.

Or you can say it’s DtA, if the argument goes thusly:

  1. If two things are related, they are 98% alike.
  2. Clouds and watermelons are not related.
  3. Therefore, they can not be 98% alike.

DtA has the following form:

If P, then Q.
Not P.
Therefore, not Q.

Here, the argument tries again to say that since #3 is not the case (Clouds and watermelons are, in fact, 98% alike) that #1 can’t be true. But of course, the argument is logically invalid. #3 again doesn’t follow from #1 and #2. Again, there is more than one way that something can be 98% alike.

Finally, it could be a strawman if the “If P, then Q” part is:

  1. If things are 98% alike, then they are related.
  2. Clouds are 98% like watermelons.
  3. Clouds are related to watermelons.

In this case, no one has ever claimed #1. The claim is “If related, then 98%” not “If 98%, then related”. You never formally spelled out an argument in your OP, so I can’t tell you which one you’re trying to use here.

Aside from the issue of what rhetorical fallacy may be in play, on a more general level, the argument seems to blur the line between content and composition (for lack of more precise terms).

Let’s say Car A contains 2000 pounds of steel, 200 pounds of plastic, and 20 pounds of electronics. Car B is assembled in the very same manner, just with some extra features, which add another 150 pounds of stuff to the car. Obviously, because both cars have similar content which is functionally arranged in a consistent manner, the composition of both cars is very closely related.

However, if I dump 2000 pounds of steel, 200 pounds of plastic, and 20 pounds of electronics into a giant Glad bag, I do not have something that is comparable to Car A. The parts are not assembled, therefore the content may be similar, but the result is not.

When we’re talking about DNA, one can pretty safely assume that we are talking more of matters of how bits of matter are arranged and utilized, not just content of materials. Content of water doesn’t really mean anything significant in this sense.

Another question may be, if clouds are not like watermelons despite 98% content similarity, does that mean if the text of two books are 98% similar, those books should not be presumed to be related?