I was overwhelmed at first too. So I didn't do any terraforming or much decorating projects or anything for a long time. Like, really long. Then I put in a pond on one of my cliffs, to have another one somewhere on my island. Then I kind of smoothed out one of my river bends a bit so it wasn't so... jagged? It just seemed jagged or something to me. That's really all the terraforming I did. Then I put down paths. First just on one side of my island, where my RS building was, and Nook's shop and the museum. Four of my villagers houses are on that part too. I did more decorating, putting more stuff outside my villagers' houses. The side with Abel's shop has a little "village" setup with the six villagers that live on it.
I began to put things down here and there on the island. A lighthouse. Life guard chair. Just some things. Then I decided to do a shell theme on my south beach. Looks pretty nice actually, and I have a sand castle there, and a closet/fitting room wardrobe item that looks like a nice changing booth. And then came fall. I started making more stuff like barrels, hay beds, butter churns, and put them around. Leaf piles. Scarecrows. The whole works. Then this month came, and it was pumpkin DIY galore, which I've used to heavily decorate my lower level of my island with. And then just a few days ago I added a picnic area up on the cliff with the pond that I made months ago. There's garden rocks, a couple of benches, a stone table with stone stools. Looks pretty neat.
Really, just go slowly. Do one thing at a time, and like other people have said, go ahead and bounce from one area to another. My "main stretch" will literally never be complete, because I will constantly be updating with the seasons. After Halloween, the Spooky items are going to have to go. Maybe not right away. But once I start getting the mushroom stuff, I'll definitely be swapping things out. And then when December rolls around, it's going to be changing things to Christmas. With January, it'll be basic winter, and probably back to basics. Honestly, being able to decorate your island is what is going to keep me playing this game. Because I'll constantly be changing with the times. And in between, I'll think of little things to do around my island. I'm already thinking of making another one of my cliffs a little cafe area. For some reason I don't really see my villagers going on the cliffs... not sure if it's because there's not as much stuff on them as there is on the ground level?
Have fun! Look at ideas, but don't stress about making it "look perfect." You want to be able to enjoy and play the game too, and like others said, a lot of those islands make it extremely difficult if not downright impossible to catch bugs, fish, and just go about enjoying life on the island with your villagers.