Is Iceland worth it?

My husband and I (both M, 30) are flying from the US to the UK in July for a Formula 1 race, and we’ve been looking at flying with Icelandair and doing a 2-day stopover. Neither of us have visited Iceland or the UK before, so we’re trying to decide what to do. The flights through Icelandair are very comparable to any other direct US-UK options, but hotels in Reykjavik appear to be a lot more expensive.

Can anyone please share thoughts, and if you’re feeling so inclined, hotel recommendations? My husband wants Blue Lagoon Retreat but I’m financially wincing at the thought…