Yes, Don Quixote is a marvelous character. I wouldn’t object to calling him one of fiction’s greatest characters. In fact, I’d go so far as to say the character, Don Quixote, is beyond anything (anyone?) even Shakespeare could have imagined. But the book as a whole has all the faults of most prose fiction before, um, let’s say La Princesse de Clèves – desultorily organized, unnecessarily verbose (instead of necessarily verbose, which is something else entirely), indifferently plotted.
The meta-fictional aspects of Don Quixote are remarkable. In the universe of Book Two, Don Quixote and Sancho Panza are recognized by one and all as the famous duo from Book One – and most of their adventures hinge on that recognition.
Of course, meta-fiction is of special interest to us now, since it is a trope, the trope, that marks contemporary literary fiction. While writers such as Fielding, Smollett, Sterne, claimed Don Quixote as a major influence (beyond simply the ingeniousness of its reality-challenged protagonist), they did not seem to have regarded Cervantes’ meta-fictional exercises as all that important, although they certainly must have been aware of them.
Cervantes and Shakespeare died on the same day – or approximately the same, depending on what source you rely on. But Cervantes does not stand up well in the comparisons to Shakespeare to which he sometimes is subjected. To make a careless analogy: Cervantes’ Hamlet might include a lengthy recital from The Faerie Queene by Polonius, a pointed, explicit and extended malediction against The Globe’s rival, the Blackfriars Theater, by Hamlet, in the players scene, a slapstick pummeling of the gravediggers by Hamlet and Horatio and, at the end, a pedantic and wordy summing up of the play’s meaning by Fortinbras standing among the corpses.