Team 7 is definitely one of the best. Naruto's journey from a nobody to a hero is central to the story, and his relationship with Sasuke, who has his own dark path, is a major plot point. Sakura's growth from a girl with a crush to a strong kunoichi is also an important part of their team's story.
Team Asuma is a great team as well. Shikamaru, with his high intelligence and lazy - but - when - needed - to - act attitude, Choji and his strength related to his eating habits, and Ino with her mind - related jutsu. Their bond and their teacher Asuma's influence on them play a significant role in the story.
In a 'naruto failed sealing fanfic', it could lead to the release of a powerful and dangerous entity. For example, if Naruto fails to seal the Nine - Tails properly, the beast might break free and rampage through the village, causing destruction and chaos.
One great Naruto and 'Chivalry of a Failed Knight' fanfiction is 'Naruto's Knightly Adventure'. It combines the unique ninja world of Naruto with the chivalry concepts from 'Chivalry of a Failed Knight'. The story has Naruto learning knightly skills, which makes for an interesting read as he uses his newfound abilities in battles against his ninja foes.
The people of the Hidden Leaf Village would be in danger. If it was a powerful entity that Naruto failed to seal, the village could be attacked, and civilians would be at risk. The other ninja clans in the village would also be affected as they would have to work together to deal with the situation. And the neighboring villages might also be affected. They could either be in danger if the unsealed thing is a threat to them or they could take advantage of the situation in the Hidden Leaf Village if they have malicious intentions.
Well, one possible plot could be that Naruto fails the test due to his overconfidence. He might rush through the practical parts without properly showing his skills. For example, in the clone jutsu part, he could create clones that are too obvious and lack the finesse required. This would then lead to him having to face the disappointment of his peers and his own self - doubt, which could be a major part of the fanfic as he tries to overcome it and prove himself.
Kakashi could also be a main character. He could be the one who has to deal with Naruto's failure in a different way than Iruka. Maybe he has to decide if Naruto is worth another chance. Also, Sakura could be involved. She might initially be disappointed in Naruto but then realizes that there is more to Naruto's failure than meets the eye and tries to support him in her own way.