Learn Hardcore Russian: Тебе стоит приложить усилие, чтобы исправить ошибку в отчёте. - It’s worth making an effort to correct the mistake in the report.

In Russian, the pattern (кому) стоит + infinitive treats the person as the one “for whom it is worth/appropriate” to do something. That person goes in the dative:

Тебе стоит… = It would be worth it for you to… / You should… Using ты would require a different structure, e.g. Ты должен… (You must…) or Ты должен постараться… (You should try…).

What exactly does стоит mean in тебе стоит + infinitive?

Стоит here is an impersonal “modal” meaning it’s worth it / it’s advisable / you should. It’s typically softer than нужно (need to) or должен (must).

Тебе стоит приложить усилия… suggests advice/recommendation rather than obligation.

Can I replace тебе with вам? What changes?

Yes.

Тебе стоит… is informal singular (to you).
Вам стоит… is either polite singular (to you, formal) or plural (to you all).
Everything else can stay the same.