Mind you, this is the personal opinion of someone who started playing video games on an Atari 2600 console, but I'll try to remain objective .
For me, the best part is clearly the sandbox. U7 is an open world game par excellence. This starts with its large, meticulously crafted, seamless world, rendered in amazing detail (for it's time), almost completely open to exploration from the start (for some parts you need to own a ship or the flying carpet), where you can pick up or otherwise interact with many objects, complete with dynamic weather, day and night cycle and NPCs that go about their business. Best of all, the world and all interiors can be traversed without encountering a single loading screen! (Here's a fully interactive map - spoilers, of course)
Regarding the NPCs (of which there are about 265 named ones, each with their own, unique dialogue): while many of those play a role as shop-keepers, trainers or as part of quests, most of them are also related to or otherwise associated with their fellow NPCs, and from conversation or through observation quite a bit can be deduced about their social lives and backgrounds.
Also, by virtue of being the 7th instalment in the series, there's an immense amount of history and lore that gives the world weight and credibility. While not too much of that is directly referenced in the game itself (though your companions and some NPCs already appeared in previous games, and there's a museum with "historical" artefacts and items), the fact that it exists certainly helped in fleshing out the world and its inhabitants. It's kinda like how Lord of the Rings benefited from the existence of the Silmarillion.
The plot too integrates quite well into this sandbox, as it does not enforce a strict order in which to accomplish tasks, though there are two red threads a player might follow instead of just exploring to her heart's content. I don't want to go into spoiler territory, but it's a decent story for an open world game, that will eventually take you through all major places on the map.
Aside from the whole sandbox/open world aspect, I find the user interface rather excellent too. Best of it: there practically is none :-). Normally, you have a completely unobstructed view of the game world in all its 320x200 pixel glory, and the UI that is there will only show when needed. On top of that, it mostly follows a skeuomorphic design principle: your inventory takes the appearance of a backpack, your spell-book is ... a book, etc. If you want to know what time it is, you better buy a watch. Want to know your location in the game world, get a map and sextant. So even while interacting with the interface, there's still the semblance of remaining within the realm of the game.
If you then imagine that all of the above fitted on eight 5 1/4" floppy disks and ran on a 386 with 25Mhz and 2MB of RAM, it's nothing short of amazing. Though I would understand if the graphics might be off-putting to gamers with modern sensibilities .
I will also freely admit that combat isn't all that great. It's real time without pause, with party-AI that is only adjustable within very small limits. Often enough, fights are over before you even had a chance to give any meaningful orders, with your companions madly dashing off-screen to chase after the last fleeing opponent. At least it does not distract too much from the exploration, and certainly doesn't waste your time with fighting endless waves of trash-mobs. Although foes in dungeons and the wilderness do respawn after a while.
One last thing I do want to mention is that the game is clearly from a time where developers still would not be dead serious about their creation, and I think that shows, in a good way. It's never blatantly silly, but there are quite a few easter eggs and fun or weird things to discover that might be unthinkable in a game of this day and age.