You are right, an element $v$ of a vector space $V$ is a vector and nothing else. It does not make sense to call it covariant or contravariant if we only look at $V$.
However, the origin of these concepts is in physics. Physical entities $X$ like velocity, electric field, etc., live in some affine space $A$, most frequently $3$-dimensional space or in $4$-dimensional space-time. Let us call $A$ the observation space. An entity $X$ is quantified by measurements which produce $n$-tuples $(x_1,\ldots,x_n)$ of real numbers. For example, quantifying mass produces $1$-tuples, quantifying velocity produces $3$-tuples. To perform a measurement we need a coordinate system on the observation space (a $3$-dimensional spatial coordinate system or a $4$-dimensional time-spatial coordinate system or something more complicated). For example, measuring velocity gives three components, one per each coordinate direction.
That is, we have an observation space $A$ and describe $X$ by a measurement result which is an $n$-tuple $(x_1,\ldots,x_n) \in \mathbb R^n$. But we must be aware that the entity $X$ is not an element of $\mathbb R^n$; it is an element of an "abstract state space" $S$ about nothing is known a priori. It may be a vector space or something more complicated. The dimension of $S$ depends on $X$, but the dimension of $A$ does not determine the dimension of $S$.
The measurement process can be regarded as a function assigning to $X \in S$ and a coordinate system $\mathfrak C$ of $V$ a value $\phi_{\mathfrak C}(X) \in \mathbb R^n$. The function $\phi_{\mathfrak C} : S \to \mathbb R^n$ is assumed to be injective.
Let us emphasize again that $X$ is not the same as $\phi_{\mathfrak C}(X)$; the latter is just a measurement result. Obviously we may get different values $(x_1,\ldots,x_n)$ of our measurements if we use different coordinate systems.
In the simplest case we consider coordinate systems having the same origin; we do not take into account translations or moving coordinate systems (as in special relativity). In other words, we may regard the observation space $A$ as a vector space (e.g. three-dimensional space or four-dimensional space-time) in which our measurements are performed, and for each ordered basis $\mathfrak B$ of $A$ we get an associated injection $\phi_{\mathfrak B} : S \to \mathbb R^n$.
Of course there must be a definite relationship between the quantifying tuples associated to different coordinate systems (resp. ordered bases), but it is a priori not clear what this relationship looks like and what its mathematical description is.
A very nice situation occurs when $n = \dim A$ (i.e. the dimension of the measurement result space $\mathbb R^n$ agrees with the dimension of $A$) and all $\phi_{\mathfrak B}$ are bijections. This means that the state space has the same dimension as $A$ and that the elements $X \in S$ are "vectorial entities" in $A$.
What happens if we make a change of basis in the observation space $A$? Given ordered bases $\mathfrak B =(b_1,\ldots,b_n)$ and $\mathfrak B' = (b'_1,\ldots, b'_n)$, we get an automorphism $\phi_{\mathfrak B'} \circ \phi_{\mathfrak B}^{-1}$ on $\mathbb R^n$. As already mentioned, it is not a priori clear what this automorphism looks like, and the answer depends on the given physical entity. The most elementary two cases are that $\phi_{\mathfrak B'} \circ \phi_{\mathfrak B}^{-1}$ behave covariant or contravariant. This means that if $A = (a_{ij})$ is the matrix such that $b'_j = \sum_{i=1}^n a_{ij}b_i$, then $(\phi_{\mathfrak B'} \circ \phi_{\mathfrak B}^{-1})(x) = A^t x$ for all $x$ (covariant) or $(\phi_{\mathfrak B'} \circ \phi_{\mathfrak B}^{-1})(x) = A^{-1} x$ for all $x$ (contravariant). In both cases there exists a unique vector space structure on $S$ such that all $\phi_{\mathfrak B}$ become isomorphisms of vector spaces. Physicists call the elements of $S$ covariant resp. contravariant vectors.
Covariance and contravariance are not intrinsic properties of the vectors of the state space $S$. The elements of $S$ are vectors and nothing else if we only look at $S$. Covariance and contravariance become visible only under the measurement process which gives isomorphisms between measurement result space and state space. I think it was a great achievement to recognize that measurement result space and state space of vectorial entities need not be identical although they have the same dimension.
In the covariant case the state space $S$ can be identified naturally with the dual of the observation space $A$, in the the contravariant case it can be identified naturally with $A$ itself (see Why is tensor from a vector space covariant, not contravariant?). But this is a purely mathematical point of view, not all physicists will perhaps be interested in these identifications.
In physics there are many important non-vectorial entities. Examples are tensors.