In my opinion, it peaked in Windows XP. XP's themes were way more customizable than 98's. You could patch the uxtheme DLL (disable the signature check) to allow third-party themes.
It did more than "a few colors", compared to today's fancy modern theming systems it was def rudimentary, but with a single click Win 98 would change colors, the cursor, the entire sound pallette and even button images iirc. I was particularly fond of the Computer theme and the Space theme lol
You're right except button images. That wasn't a thing. But you could change fonts which I'd forgotten. My point though is that the things they let you change were pretty limited.
my memories are kinda foggy, but using Plus! in 98, some themes (like the space one) did change the dialog images, too, didn't they? (so the info bubble, red circle X, yellow triangle exclamation mark etc)
Yeah I think some PCs came with Plus bundled/pre-installed. I got a copy from a friend at one point years into the 98 era, but otherwise never used Plus.
I remember running a 3rd party shell in windows 2000. It worked most of the time and had some cool widgets. When it crashed explorer would take its place.