Ok, here goes.
An ETF, or a Mutual Fund, is just a wrapper - it's a container. There are all sorts of different ones (and often, if not always, if there is a mutual fund for something, there will be an equivalent ETF. The only difference is that ETFs are traded like stocks, where mutual fund prices update once per day and you can hold fractional units (so you can have 0, 1... units of an ETF, but 0, 1, 1.13, 1.37 units of a MF).
So then the question is: What do you want to invest in?
There are ETFs that are 'dividend aristocrats' that buy companies with a long history of annual dividend growth, there are market-tracking ETFs (IMHO - these are "the best" - they follow the market they are named after, and tend to have a low MER - which is the fee you 'pay' invisibly - it's just deducted from the dividend).
There are also the ones the fund advisors will tell you are good - actively managed ones, that cost 1.5%, 2.5% in MER or fees a year. They tend to lag the return of the index-trackers by the MER - if not more - because the fund managers tend not to be able to beat the market. This is not what Vanguard does; they provide very cheap index trackers.
So you're going to put this in an ISA. That may or may not be the best plan for you with Vanguard due to the withholding - you'd need to check that out.
ETFs I mentioned before:
HUKX.L and VUKE.L are HSBC and Vanguard, respectively, tracking ETFs that follow the FTSE 100.
HMCX.L follows the FTSE 250
XESX and H50E follow the Euro Stoxx 50 index (50 largest Eurozone companies I believe)
There will be bond ETFs as well - XG5D.L is one (have a look on etf.db.com), but you'd need to research them as I don't hold any bonds at all at the moment.
If you are going to follow index investing, the dividends you get will follow the market the index follows. The FTSE 100 pays about 3% I believe. But, of course, you have capital appreciation on top. If you pay in for 7-8 years your yield percentage should go up.
There are 'multi-asset' products out there, that will have stocks, bonds, and other things in, if you want a one-stop shop. This is ok... but it's not hard, IMHO, to go: Ok, I want 60% stocks, 20% bonds, 15% REITs, 5% precious metals... and buy accordingly.
As I said, with iWeb at least, you can set up a direct debit, and automated purchases (so 960 in/buy 300 of a FTSE 100 ETF, 250 FTSE 250, 250 gilts, and the rest on something else).
Oh yeah - in the UK, (government) bonds are called Gilts. In the US, Treasuries.