You have skills and items, you keep those with your toon unless you die. You lose 5% of your skills if you die, and your items stay where you die, you can retrieve the items. The world you play in progresses and gets more challenging as bosses are defeated. The buildings you build are in that world.

So, if you get a group of people together with varying levels of gear it's not going to give you a very good Valheim experience. Generally you'd want to start fresh with a group of people. Or match up with people roughly at your progression level. Having varying levels of skill and experience wouldn't matter so much, that's just going to determine how much dying you'll do.

O and there's no matchmaking, other than the sub forum.