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Super Mario Bros. 3 is still the best game in the series in my opinion. Mario World has the better graphics (obviously), but SMB3 has more varied levels, stellar gameplay, feels like an actual grand-scope adventure and the power-ups are amazing.

Bonus question: I definitely want the next SMB game to have better production values. The "New" series (after the first game) basically felt like B-titles Nintendo didn't really want to develop. The next game should feature more world-building, more playable characters (what about Daisy?), be of grander scope (exploring actual kingdoms instead of just generic "worlds") and modernize the gameplay. Maybe a more open-world approach would work if done correctly? Maybe adding more "adventure" elements would make the games feel fresh. I want the series to get rid of the never-ending monotony of "grass world, desert world, ice world, jungle world" theming. There is so much they could improve! I don't want a story-focused title but the player's actions should tell a story when playing a Mario game. Right now they don't because the games feel like they were made in a sterile level-editor.

There's so much potential in this series!