I think the way the modern Smash games handle character cameos is really a cool idea in theory, having them appear pretty prominently and cheer you on, but the fact they don't really speak, react, or move out their fixed positions makes me prefer the Smash 64 approach of hiding them as easter eggs. I feel Smashville is probably the closest a Smash stage has gotten to getting spectators right, since the animals - despite not being coded to react to any specific scenarios, are still reacting to the battle in some form. The dragon on Cloud Sea speaking is really fun too, but the fact everyone else is silent makes it a lot less interesting.