If you're into modding, Build In Dungeons [valheim.thunderstore.io] is... dated, but it still seems to work.

Originally posted by PGxRiver:

I think it would be great if I could build a cave

Not EXACTLY the same as a "cave", but you can dig out underneath Elder altar which makes a very safe underground base... the top is completely indestructible, and I have never had any mob actually get inside.

I added wood walls in mine but you could leave it just as dirt walls to give it a cave "atmosphere"

https://steamcommunity.com/sharedfiles/filedetails/?id=2643985164

https://steamcommunity.com/sharedfiles/filedetails/?id=2434836833

It'd be a huge engine overhaul to allow actual caves, it doesn't support overhangs at all and you can see its limits most clearly where rivers generate alongside mountains. The best you can do is build underneath the giant scenic rock pieces, but it's distressingly easy to ruin those with a single pickaxe misfire.