Which faction is the most interesting to play as, and what strategy do you find most engaging?

I just can't bring myself to play the elves, it's boring, a hassle, etc.

You will, you will.
Believe me :) sooner or later, you always end up playing other Factions)

SE has the most initiative-heavy units

Lie. The Furies are by no means shining examples of chastity and holiness, but their init is 16.
And the demons, they have many high-initiative warriors. As for SE, maybe the fairies, the dragon, and the useless swordsmen, but they are far from the fastest in the game.

with SE - go for Luck

Damn. I've always wondered why many consider Luck to be a purely elven essential skill?) Maybe it drops for them more often, but it's good for any hero. Absolutely. Whether it's Gorgutz with a stick-shooter, or a lover of scorched rags riding an elephant.
I try to take it always.

Necros have a bunch of diverse tactics

I can only guess two. A rush with Caspar's tent, or the standard scheme. That is, skeletons-zombies-liches-vampires. With studying death and, often, summoning. That's all. Well, maybe I'm ignoring perversions like diplomacy with free undead gathering across the map;)

Regarding the subject..
The most interesting to play are TE, Inferno, Orcs, Dwarves. Why specifically them?
Because the others lack variety. Humans, forest-dwellers - just shooting creeps with archers. Necros - you couldn't imagine anything more monotonous. Meat-meat-meat-liches, vampires. Dilute it with darkness.
Mages.. well, it's more interesting here, but not by much. The main difference from Dhoine and Seidhe - instead of cool shooters, you have magic blasters. Well, gremlins fart around. Mages deal damage. And gargoyles make lightning more usable. Although the creatures themselves are interesting.. mini-arts are nonsense, I almost never made them. If there were extra resources for them, it was already the end of the game. Although they give substantial bonuses. But what can you do..

..but the "interesting echelon" has its own zest. TE - they are simple to play, but terribly interesting. All these dances with a single stack of Furies among hundreds of knights, powerful breakthroughs of defense with riders, precisely calculating damage and counterattacks, teleporting hydras into the center of the enemy horde, calculations of invisibility and mana (even if it's on the verge of cheating :)), and so on, and so on.
Dwarves.. they aren't easy at first. The fat ones die slowly, but they don't swing hammers very nimbly themselves. The shooters are weak, until you grade them into harpooners. So we hold on - on the fat of the defenders and the sticks of the throwers. But! You can play as Ibbo, and chase the enemy across the battlefield with bears like a baby :) the new ones) they are much more fun)
And here is the salt - the adrenaline is pumping, because bears are melee. You can't just shoot everyone with a bow or crossbow. You have to use tactics (:)), skillfully use runes, distribute living weight across enemy stacks, remembering the need for high unit density for Soldier's Luck to trigger, specifically - the ability) the risk of losing troops is more than paid for by the sea of fun and joy when breaking through the simplest neutrals, not to mention heroes.

Orcs. Poor things. "300 passportless-partans". That is - miserable haters of pumpkin juice and masochistic brooms crashing into the crotch. They have no magic. But they have Tilsek. With a ballista and a miserable handful of warmonger warriors, he cleared half the map for me and captured the enemy castle. They also have Haggesh. Her unnatural entourage gives a great start. And one more little orc spent his whole life rioting and climbing fences. Once he fought a crowd of other kids in a tent. Since then he's been called Krag, from the sound he made breaking his peers' skulls - "krraag! krraag!". Everyone fears and respects him because once he destroyed as many as "seven with one blow" fat, stupid giants. But the main thing is - they were all injected at birth, except for the wyverns, with a "Beijing cocktail", some Chinese junk that allows normal existence only while moving and in a furious attack. This unusual feature adds spice specifically to playing the greenskin followers of WAAAAGH!!! Greenskins? Well, yes. They've just tanned a bit.

But the main course is Hell. That very place from which Nimus sometimes visits Leli's dreams. Inferno.. how much is contained in that word. Playing them, compared to other races, is incredibly difficult. Especially now, when Delebs have stopped delivering normal powder for the ballista and instead deliver crappy powder from a tiny "corsair-1". How to play them? Is it possible to lead a bloody massacre with the Inferno? It seems to me that the developers of both 3 and 5 are afraid of church condemnation, and therefore make Infos difficult to master :D but, nevertheless, we live. Imps - dead, frail.. demons - fat, weak. Dogs - scary, biting, but thin. Nevertheless, - we live. And we fight. We use various tactical perversions, such as: "okay, bush, let's see.., and I'm in a house!", "that doesn't count, that was a summon from the gates, bugaga, stupid creeps!", and even "come on, catch me, iron wreck, just don't run onto the blade of my seasoned colonel's axe", and so on.
As you can see, life for sinners is in full swing, very cheerful indeed, and "I will cut zhear throats", right in the best traditions of the "rapid onslaught of a rotten army of the dead", only funnier, faster, and more spirited. It becomes especially funny when, hoping for a win, you crash horses and dogs straight into a crowd of enemies, sparing not your own belly, because the deal is this - either we get them, or they get us, literally one dash decides it.
And storming castles is really fun - one sneaky, long-tongued saboteur from the Terrible Infernal Gates opens the door for the main contingent, distant fat ones fly over the walls with the help of jetpacks and catapults, and suddenly from the gaping space of the earth comes a mean uncle who looks like a metalhead and brings with him rottweilers with skate-ogres.
That's how fun we live. Join us. It's not too late to commit a mortal sin! Everything is in your hands! Maybe even a razor - any means are good for a journey to the cheerful Auchan hell!