Tip: When determining a time limit, remember that players won't be as familiar with the level as you are. If you normally complete the level with the timer around 100, others might run out of time on their first try.
I'd go to Chocolate Island, then evict Wendy from her castle so I have a permanent shelter in a place where I can just chew on dark chocolate mountains, catch fish and mushrooms from airborne bubbles, and run circuits around the third level. I'd have a pet fire-breathing miniature rhino to help me cook and boil water and I'd set up a desalinization system north of the castle. I'd go through the pipe to set up an observatory in Chocolate Secret so I can see what Bowser's up to, so that I can exchange intelligence for neat stuff from the Mushroom Kingdom.
Just look above you... If it's something that can be stopped, then just try to stop it!
I feel like I'd end up building a house on that one island in Dinosaur Land that was rumored to have the Laser Suit on it. Not because of the hoax though, it just seems like a nice little area to live on. As for the rest of the place, I'd probably just end up exploring a whole lot of it. Assuming that things to me would look semi-realistic, rather than in the Super Mario World style, I believe several places and landmarks would look very fascinating. Donut Secret 2 and Star World's map for example.
Just imagine being in a completely icy cavern, every wall glowing a bright and cold blue as reflections bounce left and right off the stalagmites. Or imagine being way up high in the stratosphere, above the clouds on a dreamy star-shaped platform; the stars glimmer on with the moon in clear view, looking almost as if you reach out and grab them.
I'd also totally go scuba diving in Soda Lake to see if the body of water is actually carbonated (and be dissapointed to find out that it's just salt water).
Id tamper with a bunch of stuff to make it harder for mario to get around dinosaur land and take away all of the existing powerups throughout dinosaur land and sell them to mario with unreasonable prices and ill hide all of the yoshis in the island where the laser suit was rumored to be at and use them as an egg generator so that ill have a unlimited supply of eggs and take over ludwigs castle so that i can live there since i feel like his castle is at a nice place with probobly a nice view
This is my layout i plan on adding one soon
If I lived on Super Mario World (as your thread title states), my life would be pretty terrible. Living on a game cartridge is really rough. I might even have trouble sitting on it, nevermind living on it.