Dunno if I can say it's the best (yet) because there are more I need to play, but I can say Lunar 2 Eternal Blue Complete is definitely one of the hardest.
The first few hours aren't actually that tough and many of the early boss fights are easier than the dungeons they're set in (IMO). But the last third of the normal game does start building up the difficulty, then there's the entirety of Zophar's Keep and Zophar himself. Somehow they made him a lot harder in EBC than the regular Sega/Mega CD version (which was already hard for that boss fight, though maybe in ways also a bit harder because of quirks like the split inventory for each character in the party).
The Epilogue though? Yeah, this is probably where it being considered a hard game comes from. Even the easiest of the Epilogue dungeons is very challenging because you're afraid to flee battles lest you fail and take tons of damage (with multiple characters probably getting KO'd), then the damn harpies can try Charming the whole party...and these are just regular enemies! Even the boss fight for the easiest of the Epilogue dungeons is kind of like the Zophar fight, because they summon 3-4 powerful minions before you can kill the talisman summoning them and the summons still stay and fight (oh, and it buffs their attack strength ridiculously high, too).
But I'd much rather have a "hard" RPG (JRPG in this case) that makes you pay attention to each battle and be considerate of your resources; Lodoss-tou Senki for the Super Famicom is similar (and has a very cool battle system).
Tough call. The first game that popped in my head was shinning force 2 so I'll go with that.
Still have to play Scenarios 2 and 3, but Shining Force 3 would probably be on my short list for best RPGs ever, FWIW.
One I need to finish. Didn't get to Disc 2, but I've been waiting for long enough so the first parts feel fresh again.
Which, that time's been arrived. But I've gotten to playing other RPGs in the meantime. I'll return to PDS sometime soon for sure. The atmosphere in that game is otherworldly.
Also it 100% deserves a remake (with the original team would be best).