How does the substrate voltage change the state of the MOSFET?
No, you can't increase the substrate voltage to 5V...that would cause the substrate-to-source PN junction to become forward biased.

However, you can change the substrate-to-source voltage and thereby change the transistor's threshold voltage...this is called the "body effect". Making the substrate more negative with respect to the source will increase the transistor's threshold voltage. MOS circuits usually do not allow the substrate voltage to be higher than the source voltage, so the lowest transistor threshold voltage would occur when the source and substrate are tied together.