Try looking at it this way. Take a toy boat into the bathtub, to keep things nice and small.
Start by holding the boat just touching the water. Right now, the boat and the water aren’t interacting, aren’t applying forces to each other.
Now, let gravity pull the boat down a little. The boat pushes against the water, causing the water to displace. The displaced water has to go up, because it’s confined in the tub. The displaced water wants to go back down because of gravity, so it pushes down against the rest of the water, which is turn pushes up against the boat. The amount of force pushing against the boat is equal to the weight of the displaced water. (Weight IS force, so this makes sense)
Now let go of the boat completely. As gravity pulls it down, more and more water gets displaced. The more water gets displaced, the more it pushes against the boat. So the farther down the boat goes, the greater the force pushing up on it.
On the other hand, the force pushing down on the boat, gravity, doesn’t change (significantly) as the boat moves. Eventually, the force of the water pushing up on the boat will exactly equal the force of gravity pulling it down, for a net force of 0, and that’s the depth the boat will float at.
The fun thing is, that’s not the only explanation of what’s going on. Here’s another that’s also valid. If you submerge an item in water, the water will press on it in all directions. That should be obvious to anyone that has put their hand in water. The amount of pressure depends on how deeply submerged the item is. That makes sense, too, the deeper you are, the more water over your position there is to push down.
So, you put a boat in the water. The water pressure pushes against the boat in all directions. All of the horizontal pushes just cancel out, because every bit of water pushing the boat to the left is countered by water on the other side pushing it just as hard to the right. But the water at the bottom of the boat is pushing up harder than the water at the surface is pushing down, because the bottom of the boat is deeper. And lo and behold, if you do all the math, it turns out the difference in force is exactly equal to the weight of displaced water, so long as the boat wasn’t completely submerged!