DW did the Iceland stopover enroute to Europe long ago (before I met her) and loved it.
For my money, Iceland is so beautiful that it's a destination in itself, and well worth at least a week on its own.
Trivia:
The Icelandic language has not mutated with the rest of the Scandinavian languages, and remains close to the original. As a result, any literate icelander can read the medieval sagas and eddas with little or no trouble.
The Icelandic animals have evolved into fairly unique breeds. The horses, for example, are short and very shaggy, as are the sheep. The sheep are really amazing. Their wool is so incredibly rich in lanolin that a hand-knit Icelandic sweater (a big cottage industry there) is so soft that you can wear it right next to your skin with nothing in between.
The cows give milk that tastes better than any milk I've ever had in my life, and I've lived all over the world.