Is holding attack or mashing attack the better strategy?

Assuming you want to achieve the max damage(dmg) output, the best combination differs for every character.

For Xingqiu i.e. the best combo is 1>2>3>4>Charged(youtube), and I've seen others with their best DPS combo in such kind of videos.

Hu Tao's best dmg output is when only spamming charged attacks, because when in her elemental skill, the charged attack is performed much faster and with C1 has no stamina cost. So it's 1>Charged

Razors best DPS combo is simply doing 4 normal attacks and animation canceling the last attack. Animation canceling means to end a long animation by jumping or dashing. So it's 1>2>3>4>Dash.

The "best" combo heavily depends on the caracter itself, so look it up for your characters! There are a lot of guides on that topic with the best combo.

General Tips:

Charged attacks have 3 major drawbacks and 1 advantage: They cost stamina, knock the target back and take more time to perform than a normal attack, but deal increased damage.That's why the Overload reaction (pyro+electro) isn't very famous - it knocks the enemy out of your reach.

For claymore-wielding characters, I know of no charged attack that's worth doing because of the long spinup time.

Bow users are special as you need to aim manually when using the charged attacks. With bow attacks, you need to charge attack to hit certain weak spots, i.e. the cores of ruin guards or hilicurls heads.

Charged attacks on spears make you charge forward, changing your position on the battlefield.

The charged attack has higher DPS, but the given drawbacks (stamina usage, knockback, relocalization). I don't know if that counts as well for claymores, but I simply hate that long "I take my weapon, I lift it up, I go in a fancy pose, I start swinging"-thing that takes about 10 min to start.

If you are talking just basic attacks, then each character has a specific combination of attacks which will maximise their damage.

If we take Kamisato Ayaka as an example, and head over to keqingmains.com. They list a specific attack rotation for her which maximises her dmg.

https://keqingmains.com/ayaka/#Optimal_Combos

The one to look at is

N2CD

Ayaka’s go to combo, it has her highest damage potential by a slight margin over N3CD. Recommended.

This is 2 normal attacks, charged attack and a dash.

Taking this into account, you'd want a specific combination of both both basic and charged attacks.

It's also worth noting for other characters, like Keqing, her charged attack has a knock-back effect, so can be used situationally. So you might need to figure out what the best strategy is based on your team composition.