I have an unusual answer for this: Matilda.
This is the perfect portrayal of magic – not in the sense of being a magician, or of magic as an art form, but rather what magic would look like, and be used for, if it were real (at least, the type of magic that I like to imagine).
There are no wands, secret potions, or satanic rituals - just a cute girl, who controls the things around her with a point of the fingers. And how does she use her powers? To improve her life and the lives of those around her.
This was my favorite movie growing up, and one of the reasons I fell in love with the idea of magic.
As for a movie that best captures the real-life world of magic and illusion: The Prestige. The worst: Now You See Me. That movie is terrible.