Every player on the same switch plays on the same island. Only one player can actually play at a time, but another can join on a separate controller and act as a sort of sidekick that can fish and pick vegetables and such. My husband and I like to split of the gardening across the island then take turns helping each other with our respective sections.
Animal Crossing sorta has 2p mode. The second player can’t walk too far from the main player and has more limited gameplay options, but it can be fun to run around and fish together.