1)
Wolf is not "The" Star Fox Villain. At best, he is a rival. A part of a team that is meant to be morally-inverted but skillfully-equal to the protagonists. He's antagonistic, but merely acts out plans of Andross for him.
2) Yes, he's far more differentiated from Fox than Falco. While all three share a final Smash, Wolf's normal "A" moves share almost no resemblance to Fox's and his specials are more unique in effect.
However, Falco has two big factors going for him over Wolf.
A) Seniority. Say what you want, but Falco is much more integrated into Smash than Wolf was. Partially, you could tie this to their SSE roles but Falco is much more Smash-inclined than Wolf.
B) Popularity. Falco, being one of the top-tier characters in Melee and Brawl alongside his cocky attitude, has made him a far more popular character in Star Fox and Smash alike. Wolf, as I recall, was met without fanfare or many people truly liking him as his own character ("Where's Krystal?!"). While being more unique, many felt he "played worse" and was "inferior" to the other two of his franchise. If just series relevance mattered and popularity didn't, Dr. Mario would have been part of the Forbidden 7 instead of Roy. It does have a factor
I'm sorry but if one of the Star Fox characters was getting cut, it surely isn't Falco.
Personally, I see Lucas being more likely to being retained because of popularity in Brawl and how vocally abundant Mother fans still are worldwide. Star Fox's popularity has dwindled down to being the States having a vast majority of the fanbase, which was dwindling down ever since the Gamecube. Sure, Star Fox Wii U has risen some hopes, but I think it's a case of being too late because we merely heard that it was being worked on, not anything relative to concept back at E3 2014.
By the time of the roster being set in to some extent by early development, the latest two Star Fox games (Command and 64 3D) combined barely outsold Fire Emblem: Awakening (the amazingly-received game of an otherwise niche series) in copies by I think 10k worldwide. While sales aren't everything, it can be seen as a correlation to popularity but by no means a causation between the two. I hate to be the cynic here, but I'm just trying to state some of the facts before us.