This has taken me a while to explain but these are my thoughts from what I have learnt and seen (best images that I think show this would be Ernie Els, 'building a classic swing'.

Ok. Person A takes his driver and say that half way back, his arm is parallel to the ground (9 o'clock), from the front the club shaft is vertical and from down the target line the shaft goes through his right shoulder. Due to club length and lie, at address Person A does not bend as much from the hips and it appears that the club is moving more around his body.

Person A then takes a short iron. Again half way back, his arm is parallel to the ground (9 o'clock), from the front the club shaft is vertical and from down the target line the shaft goes through his right shoulder. Because the club is shorter and more upright, at address Person A bends more from the hips so during the swing it appears that the club is moving in a more upright plane and the shaft appears more upright.

In relation to his upper body the club is the same position. It is the same basic swing. The only difference is club length/lie, so angle of the upper body during the swing and ball position.

I am not saying that everyone should have the shaft going through their shoulder, its just an example.