Yes, hoff in this pattern is an adjective meaning ‘favourite’. It is unusual because it is one of small number if adjectives that routinely come before the noun - this means that the noun that they come before takes a soft mutation:
- fy hoff fwyd - my favourite food
- dy hoff gaffi - your favourite cafe
- eu hoff gar - their favourite car
- hoff bwnc yr athro - the teacher’s favourite subject
'Eating pasta is my favourite thing' is good English but not 'eat pasta...'
Recently had the following English translation marked wrong:" The thing I like most is eating pasta". Correcct answer was given as "the most", i.e. "The thing I like the most is eating pasta. I think my answer is also correct. In fact a previous identical sentence was translated by Duolingo itself as "The thing I like most..." And, in addition, the sentence "Fy nghas beth... was translated as, "The thing I hate most..." - no sign of a "the".