Is it considered a meritorious practice to have a fancy/expensive/large menorah? Normally the imperative to beautify mitzvos is related to the mitzvah item itself (e.g. talis, tefillin, esrog), so here I would assume it would mean to have beautiful candles.
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First of all, note that opinions brought in Avnei Nezer 2:500 that you need to have the candles lit in some sort of kli (vessel) and not just loose. According to these opinions, the menora itself is a mitzva object.
That said, even if you don't rule that way we have a notion of hiddur mitzva even for things that aren't direct mitzva objects such as the quill used to write Sta"m (Shabbat 133b).
The Mishna Berura (673 sk 28) does note that one should expend effort to have as nice a menorah as one can.
Meseches Sofrim 20 seems to imply as much.
cf this lecture (around the 22 min mark)