You need to activate the F5 console by adding "-console" (without quotes) to your launch options (Steam client -> Right-click on Valheim -> Properties -> General -> Advanced users may blah blah blah).

The drop-down box under Launch Options that contains "Ask when starting game", "Play Valheim", and "Play Valheim using Vulkan" is just for whether you want to use DirectX or Vulkan for graphics rendering so you can just leave that part alone. It's the text box underneath it where you add the custom launch options.