A wire transmission line will have some fixed maximum current rating and, at that current, it will drop a certain voltage.
This applies equally to AC or DC.
Suppose this voltage drop is 50 volts and the current was 1000 amps.
If the voltage entering the line is 120 volts, the output will be 70 volts at 1000 amps or 70 KW.
The input was 120 volts at 1000 amps, so the input power was 120 KW.
This is a very poor efficiency of 58 % but it also provides an output of only 70 volts at that load. And, the line voltage would be very dependent on load.
If the supply was DC, there is only one thing you could do to deliver 120 volts to the consumer. You would have to feed 170 volts into the line and keep adjusting this, depending on the load. If you got it wrong, all the light bulbs and most other equipment could be destroyed by getting too much voltage.
If the supply was AC, you could use a transformer to increase the supply voltage to 3300 volts. Now the input power is 3300 volts at 1000 amps or 3300000 watts and the output power is (3300 - 50) * 1000 or 3250000 watts. This is an efficiency of 98.5% and 46 times as much power out as before.
You still have 3250 volts to deal with, but a transformer will convert this back to 120 volts again.
These transformers are expensive but a negligible cost compared with the cost of the transmission lines. Using AC instead of DC gives you the opportunity to do this
Skin effect is not a factor at 50 Hz or 60 Hz. The skin depth at 60 Hz is 0.3 inches so there is no effect on conductors of less than 0.6 inches thickness.