Yep you can edit other people's mods its just a little annoying. Download mods are stored in Steam>Steamapps>workshop>Content> You then need to find which of the random number fold is your game that has mod. They are all mods but its all games from steam stored here. Once you find AoW 4 folder you then have to find which folder is mod you want. Can easily click folder and should be able to find title of mod some where. Just copy the whole folder and past it in age of wonders mod folder that can be found in documents. Once you start up mod program should be easily able to find mod and do your thing. Obviously remember to disable the other mod when playing so don't conflict.

Once we find the folder that contains the mod, how can we tell which file and which lines were changed? Are the modded values visible as well?

Mod folder won't give you any information. Going to have to open with pack manager and then resource editor. Unfortunately if they overwrote game files cant edit it because always reverts to default files.

If they made own original mod you can edit it. Once found mod and copy and past it in mod folder of age of wonders it will show up in pack manager. Open acp in pack manager, then open resource editor and do samething except use the pack folder of mod want to open. Everything will show up to what they add to game which can edit. How ever some of the tool tips will have old info unless you change POE edit file but don't have to do this as mod will still work with your changes.

Also in resource editor while mod is load you can also click on content and then resource packs if you want to see what files they add to their mod to make their mod possible. So if want to make own mod you know what files to add yourself.