Point #1, we're in a global economy, where USD is the de facto currency worldwide. Meaning, there are feedback loops aplenty. It's impossible to reason about in a linear fashion.
Point #2, the effects of the debt are not isolated from the reasons why the debt is pursued (and maintained, and grown) to begin with. Meaning, I would recommend reading history and reading liberally ("widely") to seriously pursue this question.
Point #3, because this is economics (okay, macroeconomics), it is actually a philosophical question. Meaning, be prepared for thinking in the context of a certain worldview or outlook. There is little room (from my worldview, actually no room) for a perfect + neutral + outside + judgemental stance.
Settle it…how?
There’s probably no sane way to do it. Strategically, it makes sense to work towards a long-term trend of lowering it as a share of GDP over time, but even there, you probably don’t want it to be monotonic.
> Will US dollar be valuable after that?
Depends on what was done to “settle” it.
> Will Americans be wealthier since there is no more debt?
No, they will not be wealthier because there is no more government debt. Depending on how it is “settled”, they might be poorer because of that, though.
> What will the money returned be used for?
Largely, for the holders other than the US government itself, buying debt of other countries and other financial assets; A US decision to “settle” its debt isn’t going to stop other actors from wanting to invest.
The US government is…another question.
> Who are these creditors and what would they do once they get back the money?
The #1 and #2 creditors, holding between them nearly a third of the US national debt, are (1) the US government excluding the Federal Reserve (“intragovernmental debt”, nearly $6.5 trillion) and (2) the US Federal Reserve (counted as part of the “public debt”, currently around $5 trillion.)