Favourite characters that I wish were used more/around longer: Doyle, Lee, The Groosalug, Lilah, Eve, Gwen, Justine, and Kate (what the hell was with her being so important for two seasons and then suddenly vanishing forever?).
Lilah and the Groosalaug I definitely loved and would have liked to have seen them more often, particularly Lilah in Season 5 where she would have been a natural fit. I still think that's one of the biggest mistakes they made for Season 5 by not including her.
Kate I liked early on, but after her father's death she was just bitter and angry and I really didn't care for her. I was hoping Angel would have just finished her in the Shroud of Rahamon.
Doyle was fine, but if giving up Doyle got me Wesley then that's a trade I'd make any day of the week.
Most improved character: Wesley - Never before have I seen a character so naturally and convincingly transform from a bumbling, pathetic joke to such a tough, intelligent, tremendously resourceful and admirable hero of immense talent and emotional depth.
No doubt. Only G'kar's character from Babylon 5 goes through a more incredible arc that changes the core of the character. Wesley's my favorite character in the Buffyverse, hands down.
While I admit she was anti-climactic do a degree, she was only in 25% of the season.....
Best character damage control: Teenage Connor and Illyria - I hated both of them and thought they were both bad ideas at first. By the end of season 5, however, I was glad they were around.
Agreed about Connor, totally. I always liked Illyria from the outset and didn't have the apprehensions about the character that you did when you watched it. But, I totally found Connor's arc annoying in Season 4 and felt they did go a long ways to redeeming him to the point where I would have loved to have him back full time in Season 6-7.
(4) Wesley: "Leave the glasses on."
One of the most brilliantly, dark disturbing lines I've seen between a "couple" on any show.