The characters honestly stick out more to me in Zelda games than the dungeons, but I'm weird like that. I think you could argue the character development point in some of the Zelda games though (unless you're talking about the very first Zelda). I don't have much experience with Majora's Mask, but I'm pretty sure characters see development as you do their side quests or just follow them around and ignore side quests. Honestly, all I hear about the game are those characters and the side quests. Link doesn't change much, but he has a definite personality and character in Wind Waker (as do everyone else). Ocarina of Time has some fantastic characters too. Most everyone is pretty static, but they do spend time building the personality and such of a lot of those characters. The characters make that game for me, honestly.

I won't get into arguing whether Zelda is an RPG though. I don't really care what genre it falls under.