Yeah, wayland needs nvidia drm modeset to function properly.
For video decoding on iGPU make sure that you have installed intel-media-driver package and check the output of vainfo command.
My guess is that VLC falls back to Nvidia VDPAU because it can not find VAAPI decoders. To force VLC to use VAAPI select OpenGL video output in settings
For Firefox, open about:support in new tab, and check if hw acceleration is used
