My paper was rejected, and some colleagues say this is due to the "reviewer's mindset." What does this mean?
Is it true that reviewer's mindset play a role?

I'm not entirely sure what you mean by &quot;reviewer's mindset.&quot; The reviewer is just trying to decide whether your article is more worthy of being published than other articles that have been submitted. It is true that the process is a bit random; submitting the same paper to an equivalent journal might yield nicer reviewers who make a different decision. But this is unlikely: if a paper is rejected from one journal, it usually means that the paper either needs to be improved, or it needs to be submitted to a less selective journal (or both).

Is the guidance to resubmit the same paper (with improved language) to a different journal a good idea?

Impossible to say without reading the paper, but resubmitting the same paper to a less selective or more relevant journal could indeed change the decision. But you should also consider whether it's possible to improve the paper.

Language is not good

This is a very common problem. As a reviewer, I am shocked by the quality of the writing that established groups submit to reputable publishers. These problems range from basic English mechanics (understandable for non-native speakers, but still needs to be fixed) to basic manuscript construction problems (poor organization, haphazard presentation of background and method, ambiguous results with unclear figures, etc.)
Many students really learn how to write by iterating with their advisors 30+ times. This is a crucial skill; if your advisor is not helping you write up your results so that they are publishable, you may need to consider finding other sources for this guidance, and be prepared to completely rework the paper.

Proposed method is just a composition of couple of existing methods

If this is true, it means that your paper is not very exciting; you combined some existing methods and got some unsurprising results. There is nothing wrong with this per se, but you will indeed need to select a less selective journal; top journals will prioritize more novel approaches with more exciting results.
Another possibility is that your paper is exciting, but it's written so poorly that the interesting bit is buried and your reviewers didn't understand the key point. If this is the case, revising the paper could address this objection.

I am not getting a constructive guidance from mentor. And I am in an environment that none of the persons around me has an SCI journal till now including my mentor.

I think this is the real problem. Normally I would say that your advisor knows what to do, you just need to communicate better with them. But you say your advisor is themselves unable to publish in these journals (which is all the more confusing; how can your university expect their PhD students to achieve what their faculty cannot)? I'm afraid I do not have the solution, but I am concerned for you. Good luck.