We can look to three sources in an attempt to explain what is typically presented as "Old Norse myths."

The first is the Indo-European inheritance. Scandinavians spoke an Indo-European language and like most speakers of this linguistic family, they inherited a pantheon that finds echoes from India to Ireland. There were only general features and occasional linguistic similarities linking these pantheons, but it is nevertheless clear that this inheritance contributed a great deal to the traditions that Scandinavians apparently embraced before conversion to Christianity. The role of the Indo-European inheritance and any homogeneity in Scandinavian folklore is easily overstated: "Scandinavia" is a term used for a large piece of real estate, and the pre-conversion period reaches back millennia. Even the semi-historical period when Scandinavians were being noticed by Europeans who kept records spans hundreds of years. Across the expanse of geography and time, we can expect that there was a great deal of differences.

The second factor can also be overstated. That said, we must not overestimate the role that written sources and the new faith had on those who finally wrote down the "Old Norse myths." Most primary sources are post-conversion, written by people who were in communities that had been converted for several generations. These authors were gazing at the past through an imperfect lens. Folk memory was affected by conversion and time. The authors were influenced by other written sources including the Bible and Classical myth, which likely influenced how they perceived the oral traditions that they heard regarding the earlier belief systems of Scandinavia.

The third factor is less well understood and can only be surmised for this early period. The Indo-European language and pantheon arrived in a region that had been settled for a long time, and there were always many neighbors with their own traditions and belief systems. Folklore diffuses, so it is likely that indigenous people and neighbors influenced the stories that were told in Scandinavia during pre-conversion times.

All this created a complex stew with diverse components adding flavor and influencing the flavor of other morsels. How all of this unfolded is a complex story that is not well understood and not likely to be completely understood. As indicated, enthusiasts of either of the first two factors tend to crow loudly about the importance of their favorite influence, but ideally, one should avoid overstatement.

In answer to your question about Old Norse mythology being particularly weird or "off the wall": I'm not sure I see it that way. We must remember that "other people's cultures" tend to be very strange, so we shouldn't be surprised when we are confronted with the unusual. I promise you that whatever belief system you embrace (or was raised in) has its share of components that would seem extremely unusual to people of other cultures.