Considering One Piece is such a massive story told over sagas, I've broken down my answers with that distinction in mind.
My favourite saga is the Alabasta Saga.
One Piece is overall fantastic, but the Alabasta Saga in particular was such a fun, sprawling adventure that introduced The Grand Line in such a big way and took us to so many amazing places like Reverse Mountain (where it officially started), Whisky Peak, Little Garden, Drum Island, and of course Alabasta. All these places were so different but told amazingly funny and touching stories and introduced many interesting characters I came to love. I love the East Blue saga that preceded this one, but the Alabasta Saga was when things really clicked for me.
My least favourite saga would be the Fisherman Island Saga.
I found this one particularly disappointing because it was the first one post the timeskip and the series has felt different ever since. I don't like how often the Straw Hats split up. It feels disjointed. And after two years waiting for them to reconnect following their split up on Saboady Archipelago, I wanted the crew back together, and I wanted them to stay that way. I didn't want them to split up again and spend large parts of the saga apart. It also didn't help that aside from a few hype moments, like when the SHP revealed their new moves and Luffy used Haoshoku Haki, the fights were pretty boring and the villains weren't very compelling either.
Favourite arc has to the be -
undoubtedly - the Thriller Bark arc.
I feel this arc deserves so much more love and recognition than it gets. To me, it remains the single most One Piece-y arc to date. It was hysterically funny at times, it had a lot of laughs as well as a lot of truly touching and heartbreaking moments. Gekko Moriah was a really fun villain with a sympathetic background, motivations and cool abilities. This arc gave us zombies. It gave us BROOK and
his badass swordplay, it gave us really cool fights and moments like the SHP vs Oars, Nightmare Luffy vs Oars, - THIS ARC GAVE US NIGHTMARE LUFFY - Zoro vs Ryuuma, Sanji getting mad at Absalom, Usopp trolling the shit of Perona with his fake ass hammers, Kuma showing up to fight the SHP, Sanji and Zoro both stepping up to take on Luffy's pain, and to top it all off it gave us
Binks' Sake. There's so much this arc had to give and it remains my favourite for that reason. What I also absolutely adore about this arc is that it is the perfect length. Thriller Bark does not drag. With so many of One Piece's arcs, I feel there's a point where the pacing slows too much for my liking, but Thriller Bark is so perfectly paced and so digestible that I challenged anyone to name an arc in One Piece that is easier to rewatch. I could turn on Thriller Bark now and marathon through it and feel entertained and engaged the whole time. Because it's the best.
Least favourite arc would probably be the Skypiea Arc.
The Sky Island Saga as a whole had a pretty great start with the story of Montblanc Noland, the introduction of Blackbeard, and the way Luffy beat Bellamy. Once they actually got to Skypiea however, I didn't think it was that great. With the exception of Enel, I didn't really care much for the villains or other characters introduced. Not to be misunderstood, it was a good arc and I liked it, I just didn't like it as much as others and feel overall my lack of strong feelings over this earns it the distinction of my least favourite arc.
Favourite character is a tough one. There isn't a single One Piece character I dislike, and if I had to pick one I like the most, it wouldn't be by a huge margin to the runners up, but for now, I'll go with Sanji.
Of all the Straw Hats, I find his fighting style to be the coolest. The fact he is so hilariously cheesy and corny yet thinks so highly of himself often times has me in tears just from laughing. He's probably the funniest SHP after Luffy and Brook. His sense of chivalry and the fact he's passionate about food and cooking for the hungry and just sees fighting as a means to an end also help to make him more interesting to me than most other characters. Also, his dynamic with Zoro is the best and one of my favourite parts about One Piece in general.
My
favourite villain is quite easy.
It's Blackbeard. How can there be any other? It's not that One Piece is lacking for great villains; Arlong, Crocodile, Enel, Spandam, Moriah, Caesar Clown and Doflamingo are all good to great villains, but the one topping my list has to be Blackbeard. No villain in One Piece is as charismatic as Blackbeard. They don't have his mystique, they don't have his back story, they don't have his philosophical nature that makes simultaneously agreeable and detestable. And unlike the other villains, Blackbeard shares several similarities with Luffy such as his ambition to come Pirate King and outlook on dreams.
From the moment he was introduced and had that encounter with the Straw Hats during which Luffy was so unusually quiet to now, Blackbeard has only grown more and more interesting as a character, and while there is no doubt of his villainy, the fact it's hard to dislike him is part of what makes him such a good villain, because in many ways, he feels like a Luffy that went down the wrong path.