Use when trying to encourage someone to feel better about a negative situation. Your game was canceled due to rain, but look on the bright side, you can rest and play better next time.
Pro Tip 2/3
Not Always Literal
Sometimes it's about finding any small good aspect, not only the 'brightest' part. Even though you failed the test, look on the bright side, you learned what to improve.
Pro Tip 3/3
Common Expression
Widely recognized and used in casual conversation to lift spirits. She's upset about moving, but I told her to look on the bright side - she'll make new friends.