Good point, Sonic 3 lacks a bit in fantastic design in some of its stages but they make up for in attention to detail. I agree with Angel Island Zone and Sandopolis to an extent ( but even Angel Island still has plants that move completely on their own ) but I disagree with IceCap since it's full of independently spinning crystals atop ice pillars, crystal bridges, crystals that glow and unnatural ice/crystal structures at every corner of the area. Also Starlight Carnival? Are you sure?
Agreed about Lost World, and I see what you mean; taking interesting aspects of our cultures and integrating them in with elements of the Sonic world is a good idea, but I feel like there has to be a balance. Sonic Adventure did a better job of that than Unleashed In some aspects I feel due to stages like Windy Valley, being based off Machu Pichu yet still looking like a dream setting with its floating islands to its bright and colorful landscape and unnaturally shaped mountains; Unleashed does have some fantastical elements to its stages but it's all so out of place when you go back to the hub worlds and see regular people standing around since they cannot possibly traverse those environments, and that's the case for both games.
I was looking through concept art in Sonic Generations a while back, and when I saw a rough sketch of Sonic in Rooftop Run, it hit me how out of place he really is. There it was, a painting of a back alley in a rustic Italian town with a big eyed spiny blue creature standing in front of it. Sonic has to have an appropriate environment to complement him. Just my two cents on that. Now I kinda want to talk about the designs of the humans since they also play into the environment.
Also about the Story Book games, those games took place inside the books, didn't they? And didn't the ending to Black Knight imply that none of those events actually happened? It's been awhile since I played those games.