Saw some posts today that got me thinking about NPCs. I know that the ingame lore so far makes NPCs, other than the trader, impossible. But I think I came up with a solution.
Have a boss, maybe the Mistlands boss, be a “mad scientist” sort. Set his lore so that he found a way to make small, isolated connections to the other realms that allow him to trap people and transport them to Valheim to experiment on.
Have a number of “labs” scattered through the Mistlands where you get research papers to burn to summon him, and once you defeat him he drops a key. That key allows you to unlock cages that spawn in on his first death as if they were hidden by his powers so that Odin couldn’t find them.
Once you free them, you then have to lead them back to the seed spawn where Odin has left a runestone that unlocks the NPCs ability to go through portals.
Then you can give them farm tools to assign them to tending crops in a certain area. Or give them weapons and armour and set them as guards. Or give them blacksmith tools and they smelt everything for you.