Most of the time I do quests if they add something more to the story or are few and fun to do.
Some of my favorites are from the Tales series, getting stuff like costumes and extra character development is great, Xillia 2 in particular is fantastic with this, each character getting his/her own storyline on top of the main game and they aren't excessive in number.
If the game is structured to get more out of it from side stuff, like Majora's Mask or Lightning Returns, I'm also all for it. Another notable example for me is the Atelier series, where most events are optional and about building up your affinity with the other characters and those with others.
Fetch quests with no real meaningful gain for me I stop doing after a while, which is the case of most of the Xenoblade series, XC1 I stopped after like 20 or 30 of them, I wasn't having fun with them, X I actuallly did everything because the world building was excellent, XC2 I'm half doing them just because of the benefits and if they are short, I did like 15 and then stopped reading and skipping text just to get my reward.
Overall, it depends if I feel I'm not wasting my time with them.
