Rockbox is essentially flat - it doesn't add any sonic coloration in it's default setting. It has a powerful EQ section though if you want that sort of thing. The stock iB software adds some slight tweaks to the midrange. Some people like this sort of thing, but most audiophiles prefer rockbox's flatness.
As far as other improvements, there are tons, it depends on what you need/want. I like having fairly comprehensive file management tools, different themes (and fully customizable ones), the bookmarking facility. When I got started with Rockbox, maybe 10 years or so ago, it was about the only firmware that would play mp3 files gaplessly. Others like the database tools, the various sound tweaks that are available, etc. It's a fairly intricate UI, might take some getting used to - lots of people just give up on it after a few hours, when like anything complicated it takes more than that to learn how to use. If you just want to play your tunes, use the stock firmware.
Whether or not you can install it without a hold switch - I don't think so, but maybe someone else will have a better idea. I think you at need to use the hold switch at least once to get it into rockbox bootup mode, but I could be wrong, there might be a work around.