My favorite season is Season 1 because that's what started the show and made me fall in love with it in the first place. Most of the characters were at their best, and writing was definitely better than subsequent seasons. It also really stands out when compared to Seasons 2-6 due to the lack of magic in Storybrooke, and the lack of Emma believing. It tells a nice, season-long story made up of a bunch of good, smaller stories put together - which is how I think a show should be structured. I enjoyed all the small town stories, the Kathryn "murder" mystery, the scandals with Mary Margaret and David, the rivalries between Emma & Regina and Mary Margaret & Regina, and even the filler episodes were nice for showing us more fairytale backstories for characters who aren't as central to the plot - like Cinderella, Hansel & Gretel, the Mad Hatter, and so on.
My favorite arc would have to be Season 5B. I'm rather surprised to see that 5B isn't all that popular because I personally thought the show was at its best since the first season. Though I'm not a fan of why they went to the Underworld or that stupid red filter they put on Storybrooke, I found myself enjoying all of the little plots with reuniting with the dearly and not-so-dearly departed characters, I thought Hades was a fun villain, and Zelena's redemption arc was extremely well done. There was little things too like Mary Margaret deciding to become Snow White again, David and James finally coming head-to-head, Henry's author abilities being somewhat relevant that I liked too. Also the Rumbelle baby plot was probably their most clever pregnancy storyline. I won't deny that the arc has its flaws, like all of them do, but to me it really had something for all the fans of the show, rather than just focusing on one or two characters like Regina in 4b or Captain Swan in 5a.
If I were to rank all of the seasons, I'd go: S1, S3, S6, S5, S2, S4.
If I were to rank all of the arcs, I'd go: S1, 5B, 6A, 3B, S2, 3A, 6B, 4A, 4B, 5A.