It makes a fair amount of sense, both for the race that Trump wants to run, and for what he personally wants in a Veep.

As for the race, Vance speaks MAGA very well - probably better than any of the other options. That makes him a good asset for turning out the base, and covering bread and butter events and press. Trump and his campaign also probably realize that this race is going to be won or lost in the Rust Belt - and Vance brings at least some geographic connection to that area to balance Trump's purely East Coast geography. Plus, he's super young for this position. That's not going to be a bad thing, in a race with two very elderly folks at the top of the ticket.

As for a Veep, Trump loves dominance and loyalty. He wants to be in charge, and he wants his underlings to have no one but Trump to thank for their position. Vance fills that bill - unlike Pence (or Rubio, if he had been chosen), Vance doesn't really have a base of political power independent of Trump. He had no political career prior than a few years ago, and his political success is entirely due to Trump. So there's not going to be any "going off the reservation" from his Veep.

This is also a really confident pick. This is a pick that fits with a campaign where Arizona and Georgia aren't really much in play any more, but New Hampshire and Minnesota are.