How to Make Better Characters
It's a big statement but as a DM you need good Player Characters in order to have plot hooks and interesting story ideas.
First off: build what you want to play, don't fill a niche that is 'needed' at the table.
When building the character ask the player what they want the character to be able to do. Don't go in with a rigid expectation of class, race and background. Talk about the character themselves and make some loose notes about themes and abilities. Also talk about characters in movies and pop culture that the PC would be like. Pick out some strengths and flaws the character would have as this provides a much more rounded roleplaying experience. Once all this is done you'll have a few ideas for classes and races.
Now you can go into the manuals and match up the characteristics with classes and races. This may take some time but weighing up the options can focus the player into the important decisions. Fill in the character sheet as you go playing into the strengths and flaws of the character.
Once the character is mechanically built on a sheet then the backstory can begin. How the player got these skills is important, not just fighting/magic but also proficient skills like religion/athletics/survival etc.
It's important to have a discussion about where the adventure is taking so that decisions based on hometown and background events are in keeping with the game world; you don't want to write a Waterdeep Harbour if the adventure isn't occurring in the Forgotten Realms or meeting a Dragon when they do not exist.
I usually send my players away after character creation to write at least 1 side of A4 about the character's history. When I write backstories I try to start them off in different ways. Thomas Newman's started with a recurring dream he had, Freedrik Dibble Von Tumbers VI started of with an autobiographical quote. Have fun with it and remember that normal people don't go wandering down holes in the ground and putting their lives on the line in the hope of getting treasure!
Working out what the character looks like can be very important and can evolve during this whole process, lifestyle and background can play a role in the height and build of the PC alongside the mechanical numbers on the sheet. Favourite colours and style of dress can be important to social class and also mechanical class.
An important aspect of a character is how they want the world to see them or even if they want to be paid attention to when walking down the street. Thoughts, feelings and fears give you a framework to roleplay within but also gives you something to potentially overcome. What a character wants is a very powerful plot hook even if it is something as simple as wealth. Coming up with a character's motto can be very rewarding as you have to think of the character's fundamental truth.
Alignment is a tricky concept and as such should be felt out in game and at my table is fluid. Sometimes the character's alignment may mechanically affect gameplay but these are very rare cases in 5th Edition and usually pertain to updated modules with alignment specific magic items.
Alongside the backstory I ask for a family tree and some significant NPCs on a separate page. These are custom built plot hooks and side quests being handed to the DM free of charge and gives the player the chance to shape the narrative in subtle ways. It also allows the DM to focus on a particular character and really immerse them in the story (remember this is a shared game). One of my players plays a Dragonborn Monk of Tyr, he is on a pilgrimage to the Isle of Sesa which is ruled by the Monks of Tyr and there are many elemental temples to visit. However the main villain in this part is the head of the Tyr monks and is Lawful Good. I wanted to test his character's faith and also place him in a situation where he would be fighting against his own kind. If he succeeds he will have redeemed his order but also simultaneously damaged it. Exploring a grey area is always fun when a character deals in absolutes.
Always remember that in the first few sessions the characters are developing in the player's mind and they may not have gotten to grips with them. After a couple of sessions talk to your players individually and just make sure they don't want to change anything before you start exploring their backstories.
May you role well!