Hands down my favorite character, from any Legend of Zelda game, is Saria from the Ocarina of Time.
Though Linebeck is pretty high up there...
As for my favorite boss, I'm not really sure who to pick. Each boss offers its own challenges, tactics, and abilities, so it's quite difficult for me to pick between them.
If I had to pick, though, I would probably go with the final battle in Phantom Hourglass
Tetra, that cute/sexy/dangerous vibe she has, its so obvious that Link wants her so bad, I love it. I definitely think Nintendo missed an opportunity to truly create a legit full story arc with Tetra thinking Link is some wussy island kid to falling in love with him by the end. That would've been extremely satisfying. But regardless it was awesome to see that sexual tension Link had for the first time in any game.