I can't give a definitive answer to either question because I've played and loved countless games since I was a kid and picking any game is essentially a betrayal to the rest lol. However, that's a boring answer so I'll just pick "a favorite" rather than a definitive favorite; I've got numerous favorites after all lol. And, by extension, try to answer a "best designed" one while I'm at it.
I suppose for a favorite (while intentionally picking from strategy games to be somewhat relatable to M&B fans), I could answer Romance of the Three Kingdoms 7. Not only is an open menu-based sandbox where you can play as a historical or created character operating as a wandering unemployed person, a common officer, city prefect, ruler's advisor, or the ruler himself, but do so with numerous features no other RTK game of the same style attempted since. For example, every city has a native specialty and new unit types are unlocked by combining technological development with whatever specialties your faction's acquired; a basic example is that, to make Horse units, you need access to horses which can be gained by your faction controlling a city that produces them natively. A more complex example is that, to make Cavalry units (a heavy upgrade to Horse), you need to forge Armor, Barding, and buy a Horse to make them. The Armor requires Iron and Leather while Barding requires... something else that I don't remember off-hand lol but, basically, you need to combine the specialties of multiple towns from different parts of China AND have enough technological development in the city actually doing the development to piece together what's necessary to make Cavalry units.
Furthermore, the game's also got my favorite aesthetic style and soundtrack in the series and incorporates parts of historical China that aren't accessible in any other title. Not to mention, it's got sea lanes connecting the northeastern sections with the southern Wu territory, making the strategic map slightly more complex as well. Overall though, I love RTK7 because it's a game with lots of freedom to do what I feel like to unite all China with numerous characters to ether play as, work with, or fight in the process.
As for design (of another favorite)... (a JRPG) Valkyrie Profile's the one that entered my mind because it's got my favorite dungeons in any video game in terms of both aesthetic design and actual layout. Not content with simple forests and ruins, the game's dungeons include puzzle mansions, magic towers with elevators and deliberately anachronistic features, a crashed spaceship filled with demons, a floating palace, and a living tower that literally eats you in its traps and digests you for you to escape. The dungeons of the game, especially the ones restricted to Hard difficulty, are the most demanding of player intelligence of any I've ever played and I loved doing whole back-to-back playthroughs as a small child. The downside was that dungeon designs in just about every RPG since have been comparatively underwhelming and uninspired lol.
Besides the dungeon exploration and puzzle aspects, it's got a great combat and RPG system, great music, art style, weighty story, a lot of freedom rather than the linearity JRPGs are typically associated with, and a few "hidden" systems that allows the player to effectively reverse engineer the game if they figure it out. I think what makes it rather well designed is that the "difficulty options" you're presented with upon starting a new game are less about how hard combat encounters are (the only thing that's effective is XP enemies give and starting characters levels being reduced to 1 on Hard) but rather the dungeons you have available to you. Basically, the only ones you can do on Easy are the relatively straightforward and simple ones while the ones unlocked by Hard are the most complex while the simplest dungeons are outright removed on Hard (you can't do everything in one playthrough since difficulty determines dungeon availability, for instance).
I wouldn't say RTK7 is as well designed as it could be simply because I know of a few ways to exploit the A.I. to make the game pretty easy whereas you have to have foreknowledge to trivialize Valkyrie Profile's difficulty. Otherwise, they're both extremely solid and addictive games by my own standards.