You’ll frequently run into one of the two dwarven brothers, Brok or Sindri. Their shops will allow you to spend resources to craft new items, upgrade weapons and equipment, sell Artifacts, buy back sold items (except artifacts), and recover Lost Items (valuable treasures you may have missed picking up)
Crafting new armor, axe pommel, and talismans will eat up resources. Common ones only costs hacksilvers while rare ones require much valuable resources on top of the hacksilver cost. You may even find recipes for new items. As such, bring it to the shop and craft it if you have the resources.
Upgrading weapons will increase their default strength and unlock the corresponding Skill tier. Kratos’ axe and blades require Frozen or Chaos Flames respectively. For Atreus, it increases his bow damage and unlocks new skills as well.
Upgrading armor pieces increases their stats and gives them Enchantment Sockets where you can freely add and swap out enchantments you have in your inventory. Be careful not to spend too much upgrading common armor pieces. You may never know when you’ll need the resources to upgrade a better and rarer armor piece.
Atreus' armors give him bonus effects but they can't be upgraded. As such, choose the kid's armor based on your playstyle and needs.