I can't exactly explain so here are some example sentences: What does it look like? (Asking for it's appearance in detail) How does it look? (Asking for a more general response, like good or bad. Typically used when you want to know the state of something.) For example, if I put on a dress and asked my friend how it looks, she might say "The dress is wrinkly but it fits nice." But if my friend told me she bought a dress and I asked what it look liked, she might say "It's white with red polka dots, and it goes down to my knees."

If you are asking a question both are used but have slightly different meanings. Here's an example: "I bought a cake for Maria's birthday" - "What does it look like?" Meaning, objectively describe the characteristics of the cake - "How does it look?" Meaning, subjectively describe the cake, i.e. are you happy with how the cake looks?

"What it looks like" or "How it looks" is correct. They have similar meanings. "What does [something/someone] look like" is asking for a description. [Something/someone] is round and fuzzy. "How does [something/someone] look" refers more to the interpretation of the appearance. (Grandpa was sick last week.) I asked Grandma, "How does he look?" She replies, "Pretty good, but he doesn't have all his energy back yet."