I used to wonder about the same thing when I first got my Squier. It was my first bass, and I didn't have the experience to tell what was most lacking on it so I could mod those first. So basically I just searched through a buttload of threads to get kind of a feel for what other ppl usually did and I tried to follow them.
I remember one poster saying there was an order in which you should mod your bass. I think it went like "pots > pickups > blah" and I was pretty surprised that some other people agreed that pots were the one part that would improve Squiers the most. Just like you, I was pretty skeptical at first, but I took the advice to heart and bought some 250k CTS pots from basspartsresource.
It was weird because my stock standard pots didn't scratch at all and I could control the volume just fine. Well, I thought it'd be fun so I just upgraded the pots for the hell of it. Turns out I suck *** at soldering, and the CTS pots fit in my Squier P-bass's small cavity only after some pain-in-the-@$$ sanding and jamming.
I thought my soldering was so sloppy that my bass would either explode or be nonfunctional. I almost regretted attempting to mod it so recklessly, but that was until I fired up the bass! The volume pots worked a lot more smoothly compared to the stock pots which were more like "on/off" switches.
And the tone pot! Wow I had no idea what it was even supposed to do until I upgraded it. I now fiddle around with it all the time to try out the different sounds.
Yeah so in short, you'll appreciate aesthetic mods after you've grown old of the look first, but hardware mods will make you a lot happier on the get-go. If you still don't think you need better pots, I guess you can search for some good pickups and install those first. But if you're gonna open up your bass and fiddle with the wiring, you can consider upgrading the pots while you're at it too.
