Both are amazing games, but for some reason, they seem to capitalize on the others' weaknesses.
That's a very poectic statement, and I think it really rings true. They truly supplement each other, and are better experienced together than apart.
Just to add some commentary to the rest of your post:
OoT lacks the characters that MM had. The characters were way better in MM, mainly in development and actual use.
That's what's key. It was
through there use that they were more developed. Because MM traded some main quest development and length in favor of a huge variety of sidequests (the use), the characters were fleshed out more (i.e. development). However, Ocarina of Time had that same pool of potential, it just wasn't utilised.
OoT also doesn't have the difficulty that MM had, despite the fact that there were way more dungeons in OoT. Same could be said for sidequests really, but that depends on whether or not you think sidequests in trade for main quest is good or not.
Personally, I don't see it as a preference. I enjoy both - however I think if you were to combine both elements you might have a game too large for most gamers. I don't think the average Zelda player is up for an 80+ game. Leave that to the RPGs. However
that would be my preference.
MM's story wasn't as compelling as OoT's, since OoT focused on the main stream characters, and was overall deeper than what I thought MM had (definitely not as emotional, though). Length is also an issue I think, with dungeons being sacrificed for sidequests.
I think you might be getting caught up in an idea of "plot" vs "characters". Both of these things make up the story or narrative. Whilst Ocarina of Time had the better plot, with greater twists, Majora's Mask certainly possessed better themes, character development and realism. Your comment about Ocarina not being as emotional as MM, is indicative of the fact that Ocarina's world and characters, and therefore over-encompassing story, is not fleshed out. MM's plot, whilst smaller in scope and with less twists, is much more fleshed out through it's characters and the events that unfold in Termina.
Difficulty, plain and simple. OoT was a joke in terms of difficulty if you ask me.
I'm going to have to disagree with this and say that is just how you personally found it.
Also are you sure you're not viewing the difficulty in retrospect? I'll admit now, it's dead easy - because I know all the patterns off by heart and the correct strategies to defeat enemies with ease. On my first playthrough though? Nah-uh.
Plus, you need to consider this series is marketed at a young audience as well. They need to make sure the puzzles are solveable, at the very least by trial and error (even if the solution can be found logically) to ensure it's playable for kids.
Also, the story lacked compelling characters...
I certainly agree with all this, but just a point in regards to Ganondorf. Whilst I agree he probably wasn't as fleshed out as character, particularly regarding his motives, he still has a tremendous presence. I think that's the reason the game got away with such little character development - the character's themselves just carried so much presence naturally - through their design, vocality etc.
Exploration for the same reasons as in OoT.
Have to disagree here. This game is BASED on sidequests. More than 50% of the game is completing things that aren't part of the main quest. I think you might have to elaborate more on this...
Difficulty. MM was a little harder than OoT, but not by much... And Majora's Wrath didn't hit me once.
Once again, are you viewing this in retrospect? I honestly get the feeling you are - particularly considering that last statement (bold). The only way I could see that as being plausible the first time you beat Majora's Wrath, is if you used the Fierce Deity's mask - and if you did that, you haven't really beaten him at all.
That being said, I could be wrong, and you could be a super Zelda god. If you are, I apologise. It just seems unlikely.
Also, I agree with Majora16's points. Very concise reasoning.