The floor boards were prepared by adding 5 mm plywood on top of floorboards and screwed in. No other...
What centres were the screws installed at? Plywood needs to be screwed down at 150mm centres
except for the last rows around the edges which need to be at 100mm centres and an set in about 10 to 20mm from the edges (to prevent lifting). With screws on thin plywood you need to be careful to sink the heads flush to the surface of the ply as any proud heads will subsequently telegraph through the vinyl. For this reason on thin plywood I normally fix the plywood using annular ring nails (about 19 or 22mm long x 2mm) at 100mm centres - or 325 nails per sheet. Easy enough to do if you have a compressor and the appropriate nailer like I do, which ensures that the heads are set flush or just slightly under, but hard going if you need to fit more than than 2 or 3 sheets (and I do sometimes need to do that)
The sheet vinyl was installed on top with adhesive
So no self levelling compound/flooring screed? As a chippie my job ends once the plywood is down, but the floorers invariably lay down a thin screed (of SLC) over the top of the plywood, spread out with a large float. This smooths out any minor depressions, fills sunken screw or nail heads and covers the gaps between sheets (which in any case should always be minimal). So there is never a need to use 2-pack filler or any othe nostrum on the plywood.
It may seem prescriptive, but in floor laying preparation is key
I am finding it hard to walk on and not soft as I imagined (we chose the thickest vinyl).
In the commercial type work I mainly do vinyl flooring is typically only 2 to 4mm thick and is laid in "medium traffic" areas because it is durable. I would only ever describe it as a hard surface, though. You may have been better served by choosing a cushion vinyl flooring if you wanted a softer feel
I can see a few seem indentations of the plywood through the vinyl . Can someone please tell me what did I do wrong?
Could be a combination of gaps between boards (boards not butted up tightly), insufficient screws near edges/not close enough to edges, no screed applied to fill screw heads/hollows in floor, etc. See description above