I'm installing laminate floors in a garage apt. (2nd floor). Why is it necessary to put an underlay and if so is it an absolute necessity to have an underlay on a second floor.

Yes it is necessary to do it, 1 it's a moisture barrier and do it works as a padding much as the padding does for carpet, you do need it.
It also acts as a sound barrier for down stairs. If there is any uneven places in the floor the underlay will help this also.