VHF is effectively line-of-sight, and no antenna size can change that (although it does improve efficiency for both sending and receiving), so for two handheld radios, you are limited to about 10 km.
The only thing that really helps extend the range is elevating the antenna, and repeaters allow you to do that even between two mobile stations.
VHF doesnt need line of sight, it has excellent ability to penetrate obstructions due to its long wavelength. For example, its not difficult to receive FM radio transmissions indoors, even from tens of km away. Some obstacles will effectively block any radio signal though, such as solid earth or concrete (esp rebar reinforced concrete).
You are right that handheld radios wont get more than about 10km, but that is due to the curvature of the earth. Mountain top to mountain top, you could easily do 50-100km
That's what I meant by "effectively": Reflections, diffraction, and (moderate, i.e. think doors and windows, not walls) light obstacle penetration make some indoor reception possible, but the radio horizon remains the strong limiting factor.
That's even true for the L- and S-band; otherwise you wouldn't be able to use a cell phone in a windowless room, for example. (Much of what's commonly attributed to "object penetration" is actually mostly due to reflections and diffraction around obstacles.)
In dense urban environments, VHF (~144 MHz) actually performs better than UHF (~446 MHz) for a few reasons... Lower frequencies diffract better around obstacles. VHF diffracts more readily around and over buildings than UHF. VHF penetrates building materials better than UHF — lower frequency = longer wavelength = better penetration through walls. UHF suffers from higher path loss over distance compared to VHF.
The only thing that really helps extend the range is elevating the antenna, and repeaters allow you to do that even between two mobile stations.