The difference between a wide turn and a tight turn is speed. This is true in other setting as well. If you are playing a space game and engaging in dogfights, you need to slow down if you want to make a tight turn.

If you are going fast, your forward momentum will continue during the turn, causing more drift and making the turn wider. If you are going slower, there won't be as much drift, allowing you to turn more tightly.

In Valheim you must have some movement going on to turn at all. Turning the wheel at a dead stop doesn't do anything. For tight maneuvering you might want to pulse the forward, or backward, button on and off so you don't go too fast to make a turn.

It's very hard to make a speedy getaway from shore if something is attacking you. You need slow speed to make a tight turn to get pointed in the right direction, unless you managed to park facing out, and then it takes awhile for the momentum to build up and get moving. Alas, no motors here.