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I haven't used full set pieces yet, just a few minor accents. I settled on LEGO figures when I started DM'ing as I had a pretty good existing collection, and supplemented it with some ebay purchases - I actually ended up buying a few sets of knock-off LEGO minifigs from China, which ended up being about $8-$10 per set of 8; quite a bit cheaper than molded figures or authentic LEGO. It let me fill in a lot of gaps pretty quickly on being able to represent various creatures/NPCs. I use some compartment organizers to hold everything, works pretty well.

For your games, it looks like you build most of the world with LEGO - do you play exclusively on fixed sets? How do you handle movement?

I use cheap base plates from amazon and do every peg equals 2.5 feet. So 5 foot squared would be a 2x2 peg square like you said. Take note that since you’re using minifigs (and not microfigs) this scale doesn’t really work well 1:1 with the official maps if you’re going to build using their grid scale (battles and exploration tend to get jammed up really badly because walls tend to be a bit too close). However if you’re like me and relatively loose with enforcing distances, it actually works pretty well for battles and gives you some creative license with your builds.

Before I got a bunch of minifigs I was building micro scale and used every peg equals 5 feet. That worked decently as well.

There are larger figures such as the Hulk or Cull Obsidian. There are others but you'll have to do some searching.

Beyond that, building them from technic bricks is an option as well.

As for getting a bunch of minis, either buy in bulk from places like Bricklink or look on craigslist and ebay for mixed lots that include minis.

A lot of the general minis can be made into bandits and such with the correct accessories.

A quick search brought a few things from Brick Warriors. Another route would be to use things from Chima or Ninjago minifigures. Also, Series 5 Dino Man.

I exclusively use legos for player minis and I try to use them as much as possible for NPCs and Monsters. As far as dungeons and taverns I use Chessex mat. I don't feel like you are ever going to get the level of flexibility you need with legos. Sometimes I will add in lego sets (like the one below) for flavor but they are always used as an addition to the battle mat.

https://www.amazon.com/LEGO-Hobbit-Guldur-Ambush-79011/dp/B00EXJM3HM/ref=pd_bxgy_21_img_2?_encoding=UTF8&pd_rd_i=B00EXJM3HM&pd_rd_r=JHB2HF6W3W2RN3NRCCCH&pd_rd_w=M0PJS&pd_rd_wg=f2anr&psc=1&refRID=JHB2HF6W3W2RN3NRCCCH

https://www.amazon.com/Chessex-Role-Playing-Play-Mat/dp/B0015IQO2O