The most popular mod out there seems to be Valheim+. It's more like a bunch of mods rolled into one. I personally don't like it, but it's probably a good place for many to start, I suppose.

If you get into mods, though, I would recommend to use Thunderstore Mod Manager. It's great for... well, managing your mods. You can seamlessly switch between modded play and vanilla play whenever you start the game, and can have different "Profiles" containing different mods.

As for what mods can do, the sky is the limit. Well, not even that--some mods even give you airships, after all. A Mod I particularly liked, "Epic Loot," gave you "magic" versions of weapons and armors that gave different abilities. There's a mod to make carts that are also workbenches, forges, and stoncutters, for those that like to build "on the go." There's mods that let you hook up your carts to your tameable animals and have them drag the cart for you. There's even mods that allow you to tame normally non-tameable creatures. The list goes on and on.

You will not find any mods on any "workshop" page here at Steam, and it's important to note that IG does NOT support mods for the game as of yet. Additionally, each update they put out seems to break one or more mods (especially Valheim+, that popular one I mentioned).

It's a bit overwhelming getting into modding at first because of all the mods there are to choose from, but once you get the hang of it, it can really enhance your Valheim experience. For a while, anyhow.

Do a search for "Valheim Thunderstore Mod Manager." Best place to start.

I strongly discourage the use of the "Nexus" mod site, for reasons I won't go into here. Suffice it to say they've given a big "FU" to mod creators.