I have done both.
The blue lagoon was okay - we went in February and yes, it was busy. The changing rooms and showers are open (gender specific though) however the locals werent shy about having a good wash in the shower. They were circular so it was hard to avoid. Not a major thing but it was a bit awkward! The blue lagoon was also quite dirty with plasters and such floating 🤮and its quite a distance.
We didnt see the northern lights despite that being the main reason for our trip.
Food wise, it was pretty expensive. Actually, really expensive. A two course meal for two with a glass of wine each in a standard restaurant (nice but not fancy) was £80 or so. For one dominos pizza we were £25. I spent £20 on a cheap bottle of wine in a supermarket which would be a fiver at home. This was years ago so I dont know if its quite so bad now.
I didnt like Amsterdam much, if thats where you are going in Holland. It was quite hard to avoid the stench of cannabis in the city centre. Again, it was quite pricey but there were more affordable eating options than in Iceland.