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

Why not any... Kifrah is weaker. Minotaurs are terrible in Heroes 5. I tried playing with them. They are slow and have low armor. Furies and Stalkers are much better for dealing damage.
Regarding the weakness of Eldar in late game... Necromancers are definitely much stronger in the end. They have necromancy and shapeshifting. And it's probably harder to kill a large Vampire horde than even a Unicorn horde. Plus, they have resurrection.
If your friend hadn't waited for epic battles and had finished you off earlier, he would have won. But he's to blame himself. He let you develop.
P.S. You can easily sweep everything in your path with Orcs without losing troops. It's a matter of practice.