Controlling the structure and the rheological properties of colloidal suspension is essential in numerous applications to control the phenomenon known as shear-thickening. Here, we report on the nontrivial interplay between hydrodynamic and frictional interactions using mesoscopic characterization of semidense, phi = 0.48, and dense, phi = 0.58, colloidal suspensions. Monitoring computationally both rheology and microstructure of these complex fluids under an external deformation, we show that in the semidense regime the interactions in colloidal suspensions are dominated by hydrodynamics while the fraction of frictional bonds remains negligible and consequently the size of frictional clusters remain small. For these systems, the normal stresses remain negative and large. For dense suspensions, frictional forces are necessary to capture discontinuous shear-thickening (DST); however, the microstructure and rheology are sensitive to the level of roughness of colloidal particles. Furthermore, we show that the frictional bonds in the dense and semidense regime follow the same statistics as random networks introduced by Erdos-Renyi where the presence of frictional bonds in dense suspensions promotes formation of a Giant percolated cluster. We show that for both semidense and dense regimes hydroclusters initially form, within which the frictional contacts nucleate. In the case of dense suspensions these nuclei grow and percolate and form a frictional network. We show that the presence of such a percolated cluster is also necessary for DST to occur. (C) 2018 The Society of Rheology.