Density altitude describes how "thin" the air effectively is at a given place and moment. Three factors raise it together: high air temperature, low atmospheric pressure and high elevation. The higher the density altitude, the fewer air molecules the propellers have to work with.
In thinner air the propellers generate less lift per revolution, so the motors spin faster, the battery drains quicker, and both the maximum payload and the ability to hold against wind drop. That is why a drone can feel sluggish on a hot, humid day even at sea level.