Start with basic stuff on that bike - lightweight tires and better vbrakes/pads. Wheels are an option but expensive. At that point a new bike makes more sense to me.

Llightweight tires - Panaracer Graveking SS or SK are popular options.

While heavier, I like Continental DoubleFighter III for mixed riding.



Brakes - Shimano Alivio T4000 v brakes are reasonably priced and work great. I’ve used these on multiple bikes without complaints.




Swapping components gets expensive if you are paying some to do the work. I have a Trek 7300 with the same Alivio derailleur and shifters and it works great. To upgrade to 9 or 10 speed you end up replacing a bunch of parts. For the DIY type it is only the cost of parts.