The most non-villain of all of the ones previously listed, but my favorite Nintendo villain is Louie from Pikmin 2.
Having your quiet, and odd playable companion go missing mid-game and reappear as the villain at the end is really compelling to me. Especially with the messages from his Grandmother who mentions his odd nature and his relationship with bugs during the period where he is missing.
My favorite part about him is how the game, Pikmin 2, has no clear villain until you find Louie as the final boss riding the Titan Dweevil. The dialogue and notes on the Titan Dweevil and Louie question whether Louie was purposely trying to kill you, or if he was unconscious, with the Ship saying Louie did it on purpose and Olimar saying he couldn't have. And once you 100% the game, you get a cut-scene that details that Louie was the one that put the company in debt, which is the whole reason the game exists in the first place. Louie being a villain is never actually resolved, and is up to the player. The game displays evidence that Louie is the villain and also evidence that he is not. This is the reason he is my favorite villain, but also the reason I don't know if Louie counts as a villain or not. Unfortunately, Pikmin 3 did nothing with this, lol.
Also Louie's notes on how to cook every enemy in the game is already enough to make me love him.
I've heard people say that he has no personality and that he was shoe-horned in at the last minute as a playable companion, but they obviously weren't paying attention.