Hardware wallets are dedicated devices used for storing secret phrase offline while making it possible to sign a transactions in the same time.
Main advantage and security improvement compared to software wallets is that you need additional step with confirmation of every transaction.
In most hardware wallets seed phrase is kept in Secure Elements, that are special dedicate chips used together with main processor in this devices.
Older devices didn't have secure element so it is recommended to use additional passphrase for them.
Hardware wallets can't be infected with viruses and malware and they are not connected to the internet directly, and all that is packaged in small form factor.
Some DIY signing devices don't even hold seed phrases permanently, so you need to load in with QR code every time you turn on device, this is better for long term storage.
Best hardware wallets are Open Source, and if they are airgapped than they are not connected with any other devices, except with QR codes or microSD cards.
This is the best combination if you are looking to enhance the security of your coins.
I made a list of most open source devices used today.
There are pros and cons for all of them, and you can buy them cheap, expensive or make them yourself as DIY project.
Hardware wallets with Open Source firmware:
DIY Open Source Hardware wallets (signing devices) (only for advanced users):
sd Signing Device without permanent storage.