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2. Then I would turn all the games graphics settings to lowest settings and any things that have an off to off. I would also turn off the sound (turns out my headset adds to the lag in this game) Make sure you do not have the increased item limit turned on as well and that you are under the 600 limit (I have 535/600 decorations.)
3. Then I would see how it plays - if it is any better then one by one turn things you want on/up.
When I'm really looking for the source of lag in games I always quit to desktop between setting changes but that takes longer.
4. Also I notice some days in this game if I log in on eternity isle instead of dreamlight valley there is way less lagging (but you have to have the dlc for eternity isle to do that.)
5. If I get lag/crash at startup or when first teleporting into the valley - I usually go afk and do a short chore for 5 minutes then return - sometimes it seems that spawning all the new thorns/chests/foragables makes the start rough then it settles.
Good Luck!