First, let me preface this with something very important: you can treat all of this advice as SECOND-DRAFT ADVICE. It is so much easier to rewrite this kind of stuff once you have words on the page. Telling yourself the first draft is totally appropriate and acceptable.
What we’re talking about here are FILTER WORDS (and to some degree verbs of being). Yes, “thought” words are included. But so are “heard, saw, looked, tasted, smelled” etc.—most words having to do with the senses.
This isn’t black and white advice; sometimes you’ll use these words and that’s okay. They’re not WRONG. They’re just weaker. And they’re weaker because they create distance between the reader and the experience of the character.*
If you want your reader to feel like they’re experiencing the story right alongside the character, you want to cut down on filter words.
*This is particularly important with first person and close third POVs. The reader always knows whose eyes they’re seeing through and thoughts they’re privy to. So you don’t need to tell them “I saw X.” Or “I heard X.” Or “I thought Y.” You can just jump into the action/observation as it’s happening.
This is also where you want to pay attention to verbs of being.
“It was rainy.” Versus: “The rain pounded against the roof.” Or “The rain howled like an injured animal.” Or “The rain tapped against the window like an anxious lover.” All of these are inviting the reader deeper into the experience of the story by using stronger verbs and similes. And, at the same time, they stir feelings (instead of TELLING feelings). And feelings keep your reader engaged. Engaged readers keep turning pages; engaged readers become FANS.