In aeronautical applications, composite additive manufacturing (CAM) is transforming aircraft design by enabling unprecedented lightweighting and functional integration. However, industrial adoption remains limited due to insufficient understanding of the complex interplay among materials, processes, designs, and performance. Existing reviews lack an integrated analytical framework; thus, this study pioneers a closed-loop “Material-Process-Design-Performance (MPDP)” framework for critical analysis. We systematically categorize aerospace-relevant composite systems and core AM technologies, emphasizing their interactions and constraints. Crucially, we demonstrate how AM design bridges material limitations and performance breakthroughs. Validation via aerospace case studies confirms the framework’s efficacy and reveals core bottlenecks: performance consistency, quality control, and certification gaps. We argue that transitioning from isolated optimization to collaborative co-optimization of materials, processes, and design is essential for CAM’s advancement. Finally, we propose a strategic development pathway to guide future research and industrial translation, particularly for next-generation aircraft and spacecraft systems.