When running a fantasy RPG game, you want a little bit of everything. You want lots of different scenes, environments, monsters, and characters. If you have the choice between a big variety of simple things or a big impressive thing, choose the variety.
Links go to Bricklink to prevent link rot, but all of them should be in normal stores, possibly at a discount, until sometime in 24.
Long ago, I was lucky enough to grab a big collection that included most of the large sets from the Adventurers Egypt theme. I rebuilt them into modular dungeon walls and dressing, and they have been a mainstay of my games for years. You can do something similar with the Lost Tomb set, which as this review discusses is a great value. I recommend splitting things up so the wall and statues are separate builds that can be repositioned on a battle mat in different configurations. And try building more statues with different heads, using the same general instructions.
In addition to scenery, you want big monsters and more minis. Ninjago reliably delivers sets that have three minis and a monster for $20, like Hunter Hound:
Other good choices this year include Moana's Boat, Cat Hotel, Baby Dragon Battle, and Ninja Brick Box.
Polybags are often good value; never underestimate the utility of those tiny terrain pieces:
But I can't recommend it highly, compared to what else you could get for $130. Not enough of the action in a game takes place in a village. It basically does the same job as the Dream Village, but costs $100 more. Still, if you want a more immersive and realistic aesthetic, it will do very well as a medieval village, especially with the castle. If you do get it, I would recommend taking them off the water-and-docks terrain and putting them on a more generic baseplate.