The Midrash (Esther Rabbah 6:9) suggests a number of reasons for this verse’s repeating Esther’s description. One opinion (that of R’ Yuda) is that people considered Esther an icon (work of art representing a person) and was liked by all.
Another opinion (R’ Nechemya’s) agrees that, in comparison to other women, Esther was the most beautiful.
However, the Rabbis there say that Esther found favor in the eyes of the “upper ones and the lower ones.” In other words, she was liked by angels and men, as it says in Mishlei (3:4) “be’eyney elohim v’adam” (“in the eyes of angels and men”). Torah Temimah explains that people care about appearances, but angels care about character. They saw in Esther that she was gentle and had a pure character. We can perhaps add that there are people who become beautiful through their beautiful characteristics.
The Talmud (Megillah 7a and 13a) says people found a kinship with Esther because she looked as though she could belong to any nation. Ben Yehoyada says the reason for this was miraculous, and its purpose was in order for people to not be able to know that this girl raised in Mordechai’s house was of a particular group – namely, Jewish. Although some want to assert that Esther’s green color (as we’ve mentioned before) may have been a beautiful, olive complexion, this favorable view is not the way the Talmud (Megillah 15a) understands Esther’s color. Her being green effectively removed her from the Talmud’s list there of the four most beautiful women in history. The Vilna Gaon wonders why the Talmud could suggest that Esther was pallid and green if the verse (2:7) itself testifies to her beauty. He answers that Esther was indeed beautiful at one point, but turned pale from sadness having to endure Achashverosh’s harem.
The Pri Tzedek writes in his commentary on Shemos that there are different levels of love, with “chein” (“favor”) meaning a love without reason, and that is the appreciation Esther received from the people around her.