The significance of this paradigm shift is that it allowed mathematicians to apply some of the geometric intuition developed from the study of finite-dimensional spaces (such as the 3D Euclidean space) to difficult questions involving functions, such as the existence of solutions to certain differential equations.
The history of this change of perspective is absolutely fascinating and can be traced back to the end of the 19th century and beginning of the 20th century. At the time, work on axiomatic foundations of mathematics was driving a systematization of the study of mathematical objects by capturing their structure with a concise list of axioms. This is for example how the concept of an abstract vector space was born, encompassing not only Euclidean spaces but also infinite-dimensional spaces of functions.
An early reference already demonstrating this change of perspective, albeit in a primitive form, is a memoir by Vito Volterra from 1889 [1]. The PhD thesis of Maurice Fréchet from 1906 [2] is arguably the work that was most influential in crystalizing the new paradigm and presenting it in a modern form that served as a key reference for the first half of the 19th century. Of course, these are only two among a multitude of works around that time. Looking at later developments in the 19th century, it is hard not to also mention the book by Stefan Banach from 1932 [3].
[1] https://projecteuclid.org/journals/acta-mathematica/volume-1...
[2] https://zenodo.org/record/1428464/files/article.pdf
[3] http://kielich.amu.edu.pl/Stefan_Banach/pdf/teoria-operacji-...