The best way I found to resolve this issue was by using a combination of the above. All my cells were entered as a Custom Format to only show "HH:MM" - if I entered in "4:06" (being 4 minutes and 6 seconds) the field would show the numbers I entered correctly - but the data itself would represent HH:MM in the background.
Fortunately time is based on factors of 60 (60 seconds = 60 minutes). So 7H:15M / 60 = 7M:15S - I hope you can see where this is going. Accordingly, if I take my 4:06 and divide by 60 when working with the data (eg. to total up my total time or average time across 100 cells I would use the normal SUM or AVERAGE formulas and then divide by 60 in the formula.
Example =(SUM(A1:A5))/60. If my data was across the 5 time tracking fields was the 4:06, 3:15, 9:12, 2:54, 7:38 (representing MM:SS for us, but the data in the background is actually HH:MM) then when I work out the sum of those 5 fields are, what I want should be 27M:05S but what shows instead is 1D:03H:05M:00S. As mentioned above, 1D:3H:5M divided by 60 = 27M:5S ... which is the sum I am looking for.
Further examples of this are:
=(SUM(G:G))/60 and
=(AVERAGE(B2:B90)/60) and =MIN(C:C) (this is a direct check so no /60 needed here!).
Note that your "formula" or "calculation" fields (average, total time, etc) MUST have the custom format of MM:SS once you have divided by 60 as Excel's default thinking is in HH:MM (hence this issue). Your data fields where you are entering in your times should need to be changed from "General" or "Number" format to the custom format of HH:MM.
This process is still a little bit cumbersome to use - but it does mean that your data entry is still entered in very easy and is "correctly" displayed on screen as 4:06 (which most people would view as minutes:seconds when under a "Minutes" header). Generally there will only be a couple of fields needing to be used for formulas such as "best time", "average time", "total time" etc when tracking times and they will not usually be changed once the formula is entered so this will be a "one off" process - I use this for my call tracking sheet at work to track "average call", "total call time for day".