Just like adding spices to the pot bubbling on the stove-top to add richness to the food, dialogue adds richness to fiction. Finding balance between narration and dialogue is the mark of a skilled writer.
Putting narrative aside, dialogue can propel a story; it can set any tone with a few exchanges between characters; it can ‘grow’ characters into believable people.
The common problems writers can have with dialogue are over using a dialect, especially if it doesn’t quite fit the character as they have been described. Not using dialogue tags, ever. There is nothing wrong with simply using the word, ‘said;’ Over using said substitutes, such as murmured, [that always makes me think of a heart murmur], gritted [what the heck is gritted?], coughed [huh?]. And finally, making the reader go back to the last time they knew who was speaking and figure out who said what, is frustrating for the reader and an obvious slip of the editor.
Using direct addresses can eliminate some of the need for dialogue tags. The main error in writing direct addresses is omitting the comma. Say it out loud. There is a comma in there. “Do you know where my car keys are, Sid?” “John, I haven’t seen your keys.” It is that simple. The same is true when using a word in place of a name, for example, Dad, Mom, Sir.
A good writer always—always—always reads their work aloud. Reading it in one’s head on the screen will produce words that aren’t written that should have been.
Talk is cheap. Have your characters talk with each other to develop them and move the story forward.