The over-wing nacelle (OWN) concept refers to aircraft designs where the engine is installed above the wing. The OWN configuration offers several advantages over conventional under-wing nacelle (UWN) vehicles, which include improved fuel-burn and propulsive efficiencies due to the feasibility of ultra high bypass ratio turbofans, and reduced noise. However, a non-optimal OWN design can result in large transonic drag penalties that can potentially outweigh the aforementioned benefits. We study the OWN design problem from an aerodynamics and propulsion perspective, using the NASA common research model, a notional 90,000 pound thrust class turbofan model, and Reynolds-Averaged Navier-Stokes simulations. We first quantify the sensitivity of drag, lift, and pressure recovery to variations in engine location and power setting, and identify trends. Then, we perform aerodynamic design optimization of the wing and nacelle to determine OWN performance improvement from outer mold line refinement at a favorable engine installation location. A 20% reduction in drag is achieved for the optimized OWN configuration, highlighting the sensitivity of OWN aerodynamics to airframe contours. However, compared to the UWN baseline, the optimized OWN drag is 5% higher at the same lift and worsens significantly at higher lift.