how to customize hello dolly plugin?

In your theme, add a custom action in a template where you want to show the output:

do_action( 'show_lyrics' );

This does nothing for itself. Now you can add the function hello_dolly as a callback for that action in your functions.php:

if ( function_exists( 'hello_dolly' ) ) {
    add_action( 'show_lyrics', 'hello_dolly' );
}