What causes two objects sliding against each other to produce heat? Why don't they generate visible light or something else?
They produce heat because the surfaces on small scales are rough like canyons rather than flat like the ocean. As these rough surfaces come into contact with each other they repel. When two atoms are brought very close together they store potential energy. When they move apart that energy becomes kinetic. However, this kinetic energy generally isn't enough to escape the object they are attached to so the energy becomes randomly distributed as kinetic energy exchanged between the atoms of the object also known as thermal energy. In some cases the energy is enough to break bonds and indeed friction can cause objects to deteriorate and fall apart as in a meteor falling through the sky being torn apart by atmospheric friction.
As for visible light, if you've ever seen a meteor shower then you know that they do produce a lot of visible light due to friction with the atmosphere.
Molecules are undergoing elastic collisions. For any given substance, the faster its molecules are colliding, the hotter it is. When an object slides along another object, the total kinetic energy plus gravitational potential of its molecules plus gravitational potential energy must be conserved. It can be proven that in Newtonian physics, for any system whose momentum doesn't change, its kinetic energy increases by the same amount in all frames of reference though not necessarily the kinetic energy of each individual object in the system. That means the total kinetic energy of each sliding object can be espressed as the sum of its kinetic energy of movement and the kinetic energy of its molecules. When they slide across each other, kinetic energy of movement is converted to kinetic energy of molecules. Since an object requires such a high speed of molecules like 300 m/s to have room temperature, not very much heat gets created for the amount of kinetic energy lost to friction. That's why it's easy to not notice that friction can produce any heat.