Right. The "Sound libraries" you hear about refers to virtual instruments for midi controllers. Theres a whole world of them.
For guitar virtual amps, thats a different matter. Its still VST (And/Or AU for macs) but we're talking about effects not instruments.
Theres a number of good Guitar ones. Personally I'm not a fan of Native Instruments Guitar Rig , to me it sounds very..... Zoom-ish. But others might differ on that. Guitar Rigs an ageing system though. Amplitubes another old school one. Less bells and whistles but to my ears a nicer tone in its amp cabs.
Going up the food chain a bit, theres Waves GTR stuff. They are OK. Not great but not terrible. Slate has a guitar effect system too that sounds a bit less digital.
What you REALLY want though are the amp modelling plugins that let you use Cabinet and Amplifier Impulses. These will give you a sound much closer to the real thing in terms of modelling amplifier behavior.
If you want instruments your choice is to either get a midi keyboard, or use a guitar-to-midi setup , either as an external add-on to your guitar (I'm told the fishman systems amazing) or as a VST system like Jam Origins Midi Guitar which converts an audio signal from the guitar to a midi signal to control VST instruments. I should warn you though that these are fiddly things. Guitars don't behave the same as Keyboards, and sometimes its hit and miss how well the system works.
Regarding Sound Libraries, Kontakt is a sample player thats used by the bulk of the libraries out there. Its about $400ish~ on its own, but its usually purchased as part of the Komplete library which is an absolutely monster sized grab bag of stuff.
If your looking for something within your budget and are specifically looking for midi instruments to be driven by a keyboard or a guitar-to-midi setup, a cheap option is EastWest composer cloud which is a monthly $20 subscription to an utterly gigantic collection of instruments. Bascially a full orchestra, plus specific brass/wind/strings/percussion libraries, a collection called Goliath which has countless instruments, Some choirs, some loop things for he hip hop people, and the excellent Stormdrum series. I should give fair warning though the Play engine (East wests alternative to Kontakt) is brutal on system resources so you want a meaty machine to run it on, and a big SSD to fit the data.
For DAW software, Garage band isn't terrible, and its basically a beginners version of the excellent logic, which itself comes with an instrument library comparable to NI or EastWests libraries. Theres also Studio One which is rapidly becoming a favorite for many pro studio folk.
Theres one though worth looking into if your on a budget, Mixcraft which is PC only I think(Maybe?) and is actually really damn good for its $100 asking price.