St. Goar or Marksburg??

Everyone has their preferences of course, but having visited both of them numerous times, St. Goar and Burg Rheinfels are far more interesting.

The Marksburg is great to visit, but if you aren't on the English tour, it is tough to try and read a description while the tour is being done. The guides range from ok to kind of awful, due to their lack of English expertise, very heavy accents and frankly, their boredom from doing this tour all day long. You cannot explore the Marksburg, you only get to see it during the 45 min. tour. There is not much to see in Braubach and not a lot of restaurant choices in this tiny village.

Burg Rheinfels is open to explore as long as you wish and if you go on one of their tours, they take you into the tunnels of this massive fortress and these are really cool. This was the mightiest fortress on the Rhein, and though partially ruined, much of it is still intact. The Great Hall blows me away every time I visit. The church in St. Goar near the train station dates back to the 1200's and is quite beautiful with its' ceiling paintings and crypt. There are many places to eat here.

If you time things right, you can visit both places though.

We’ve been told Marksburg has the better castle

They are different. Better is a subjective assessment. The Marksburg is interesting because it has been preserved as it was when it was a functioning castle, Rheinfels is a ruins but very extensive, with lots of galleries where soldiers lived. You visit the Marksburg as part of a guided tour; when it is over, you are out the door. You can explore Rheinfels at your own pace.

what about the town itself for exploring?

I'd rate them pretty much the same, with lots of interesting buildings and inns. I guess that St. Goar is a little larger, but maybe Braubach is a little more quaint.

It's a toss-up.

The castle at St. Goal, Rheinfels, is in ruins. I like it better than whole or rebuilt castles that I have visited. You can see the skeleton.

St. Goar is not really a town, but a small village. There is a nice river walk with views of the Loreley and two other castles across the river. I also like to view the river traffic at St. Goar with a ferry crossing and a stop of the tour boats as well as the regular working river boats. It is almost a ballet on water to see them maneuver. St. Goar is my favorite stop on the Rhine. However, it would be easy for me to see other folks with different interests enjoying other points more.

"...what about the town itself for exploring?"

Neither town requires much exploration time. Braubach (home of Marksburg) has more attractive old half-timbered buildings than St. Goar. St. Goar has more shops. Bacharach and Oberwesel are both near St. Goar, and both are better spots for exploring on an extended walk:

http://www.rhein-nahe-touristik.de/english/code/stadtrundgang/pg4.html
https://www.oberwesel.de/en/wandern0/stadtmauerrundweg/

I would send my best friend to Marksburg before Rheinfels. But both are worthwhile. See both if you can. I suggest you read over the comments at the review pages below if you want to come away with a more complete idea of what each place is like:

https://www.tripadvisor.com/Attraction_Review-g642094-d268085-Reviews-Marksburg_Castle-Braubach_Rhineland_Palatinate.html

https://www.tripadvisor.com/Attraction_Review-g198631-d268086-Reviews-Rheinfels_Castle-Sankt_Goar_Rhineland_Palatinate.html#REVIEWS

They aren't far apart. To see both use the St. Goar ferry crossing to St. Goarshausen and the train (20 minutes) between St. Goarshausen and Braubach.

I'll add my 0.02 since we were just there and did both in the same day because well, I am crazy. I think my 15 year old son and 12 yo daughter preferred Marksburg bc the tour was fun, but I liked Rheinfels a teensy bit more, mainly because the view from the top is amazing and I enjoy ruins, in general. I found it to be quite beautiful, and I liked that we could just explore on our own. Like others have said, they are totally different, and both worthwhile if you can swing it. We really did enjoy both, and yes, the English tour is a must. As far as towns go, we didn't do much exploring bc we had a busy day. But St Goar seemed cute and very walkable in a short time. I think either way, you will enjoy it!

I was in Braubach yesterday (6/27/18). I took the train up from Frankfurt and I walked through the town up to the castle. I got there about 10:30am on a Wednesday. At that time, and I suspect at most times, Braubach is a small, sleepy town. There are some local restaurants in the "old city" (alte stadt), but while they may be pleasant, they only have a view of the surrounding buildings, not the Rheine. (That is because the town is separated from the river by the train line.) There didn't appear to be much to explore in Braubach since it's mostly residential with businesses that cater to them (e.g. a pharmacy, etc.). When I came back down from the castle about 2 hours later, pretty much the same thing! In other words, no restaurants had opened and put tables out for lunch. You could probably find a lunch spot there, or you could go 15 minutes south to St. Goar (after crossing the river on the ferry) and easily find a restaurant overlooking the Rheine.