Can I modify the density of the contour lines?

Yes. In the Contour Lines dialogue window, select the digital elevation map for the basis. Set the interval value and offset value if needed. The smaller the interval value the denser the contour lines. The default value is 1 meter.

Height Offset just offsets the lines up or down by a defined amount.

The contour lines can be viewed in the map or 3D view section.