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Nintendo is suing the creators of Switch emulator Yuzu
(news.bloomberglaw.com)
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What is the auto-download mod tool you are referring to?
YuzuModDownloader will detect games in your library, check the built in repositories, download the mods and apply them automatically. Do keep in mind it enables all mods by default, so make sure to go to the game's settings and disable the ones you don't need.
Are these mods to improve things like stability and performance? I've found I can only use Yuzu to test out games because it's impossible to put any real time into them due to crashes.
Some allow you to enable better graphics than the native version, some can downgrade graphics to improve performance. Some remove framerate limits. Some are cheats, with infinite health and similar. It varies a lot, really.
For example, with Tears of the Kingdom on a Steam Deck there are mods to make the game run at 16:10, with better performance, and better frame pacing at 30 FPS. If you're running it on a PC, there are 60 FPS mods with improved draw distances and shadow resolution.