There are obvious advantages to having much of the aircraft in wing. Less bending loads by distributing the weight along the lifting surface, less parasite drag.

Airplanes have their fuel in wing tanks if they can and only have fuselage tanks if they have not enough wing volume. The engines are often mounted on wing rather than on fuselage - again, less structural bending loads. The main landing gear is accommodated in bays inside the wing if possible - having it all in fuselage is difficult.

People, however, like fuselage with windows and evacuation exits.

What about luggage? Is there any strong structural reason why cargo bays for checked luggage and other cargo cannot be made inside the wing?

Throughout the history of aviation there have been various designs that are, in essence, semi-flying wings.  Without googling much, one of the more commercially successful (in that it actually went commercial) were the Junkers Giants (K-1?)
incorporating some passenger cabins in the thick wings.