The genesis for the invasion of the Netherlands lay largely with the Luftwaffe. On 30 October 1939, Luftwaffe Chief of Staff Generalmajor Hans Jeschonnek personally met with Hitler to convince him that the Netherlands must be included in the forthcoming invasion of the West. The immediate rationale was that a conquest of the Netherlands would secure Germany's northwestern flank and prevent the British from using Dutch airbases to attack the Ruhr. Although Hitler was initially reluctant to commit, he relented to Jeschonnek's entreaties a month later. In his War Directives, Hitler outlined the rationale for the invasion as fundamentally preemptive (at least from his warped perspective) because if the Allies occupied the Low Countries first:

the air forces of our enemies, striking at the industrial heart of Germany, would have to fly hardly a sixth of the distance which a German bomber must fly to hit really important enemy targets. If we had Holland, Belgium, or even the Pas de Calais as offensive bases for the Luftwaffe, we could undoubtedly strike at the heart of Britain and accept even the harshest reprisals.

In the somewhat chaotic planning process that typified Fall Gelb, OKH saw the Dutch invasion as an expansion of the "Matador's cloak" that drew Allied forces further into the Low Countries and away from the Schwerpunkt in the Ardennes. The Luftwaffe also pushed for the invasion because it was a chance to conduct a full-scale airmobile assault and thus win it a prominent place in the battle for the West. Dutch neutrality in the First World War added to a sentiment within German planning circles that the Dutch Army lacked experience and would prove not to be much of a challenge to German forces, so there was very little apprehension about expanding the war to other neutrals.

Sources

Dildy, Doug. Fall Gelb 1940 (2) Airborne Assault on the Low Countries. Oxford, UK: Osprey Publishing, 2015.

Militärgeschichtliches Forschungsamt. Germany and the Second World War Vol. 2 Germany's Initial Conquests in Europe. Oxford: Clarendon, 1991.

Sewell Tyng in his book The Campaign of the Marne published just prior to the World War II offers an interesting theory. In World War I, the Germans kept open Holland for the purpose of allowing a neutral country to trade on the continent with Germany. This was somewhat contradictory to the purpose of the a quick knockout war plan.

Some saw the failure to go through Holland as a preventing a proper sweep downward through Belgium and along the coast of France preventing the decisive knockout blow to the Entente in WWI.

Along with the other rationales provided in the other comments, conquering Holland allowed the German army to have more freedom of action to knock out France and attack England.