To eat an elephant, take small bites
My understanding is that 1st drafts are replete with mistakes, grammatical errors, misspellings, inconsistencies, bad storytelling, and rotten sentences - not to be taken as an authoritative or exhaustive list.
The parts to work on last are the things that are the easiest to fix -- for me it was grammatical errors and spelling errors and errors in the manuscript format.
Therefore, it follows you should work on the hardest things first. That varies by the author. So decide for yourself whether you need your characters to be more consistent or for the story arc to make more sense or how your characters demonstrate their agency and thereby move the story along by their actions, rather than just reacting to events in the story.
Make your list of what aspect you want to improve, then judicially work on the items of the list -- fill in plot holes then make character dialogue consistent. Try very hard to not fill plot holes while making characters more consistent -- unless it's part of a plot hole.
Keep your focus on one specific aspect of your work, keeping the pieces bite-sized. When you've filled your plot holes, the elephant will feel smaller, be smaller and you'll feel more confident that revising your novel is not an overwhelming and unconquerable mountain of a molehill.
To me, it seems perfectly acceptable to iterate. Close plot holes then visit characterization or setting then revisit plot holes, etc. It's all about you and what you need to disaggregate the complexity of the problem into smaller more easily handled bits.