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you did it better than meBasically, they change people's hearts by going into this world called the metaverse, and they go to their' target's palace.
A palace is basically a place of their distorted desires, or a representation of how the targets views the world around them, and in order for them the Phantom Thieves to enter that palace, they need a name of the target, a location of where they're palace is, and how said target views the world around them.
In order to steal their heart, the phantom thieves must steal the person's treasure, which is the thing that let to them having their distorted desire, and defeat their shadow, which is sort of the true representation of the target's personality.
That's the best way I can explain it, someone else could probably do it better.