Wut at the bolded. No, no they're not.
There is only one defined individual Yoshi that is just a generic Yoshi in design, and that's "Yoshi" the Green Yoshi that serves as Mario's pal and sidekick.
The four Yoshis (Green, Red, Blue, Yellow) that debuted in SMW are clearly individual characters, as seen in gameplay text and in the ending (along with the newly hatched rescued Yoshis).
The Yoshi group that consistently helps Baby Mario rescue Baby Luigi in the Yoshi Island series are clearly separate characters. They each take turns carrying Baby Mario and in later games the other Babies.
Red Yoshi in the upcoming Yoshi Wooly World is clearly a separate character from Green Yoshi.
Aside from that, why do you claim that only Green Yoshi is the only "defined" Yoshi? No where in the games do they claim that Green Yoshi is Mario's only Yoshi friend. That's only shown in outside media and fan wikis/fan works.
Aside from that, you are the one who doesn't understand.
Design doesn't matter. What does matter is the individuality. Captain Toad is a defined character that has his own starring role spin-off game and is the Captain of the Toad Brigade, and Bandana Waddle Dee is a defined character that serves as the "elite" member of his species and is both Kirby's friend and Dedede's personal assistant/advisor.
Why would the generic counterparts of their species be added instead of the major and defined individual characters? It's not like the Pokémon where they are representing the species as a whole, they're representing themselves.
As someone who works in the industry, I can tell you that design
does matter when it come to game and character development. But don't take that from me, here's a past example direct from Nintendo where character design clearly did matter:
http://www.nowgamer.com/news/1695711/why_no_peach_in_new_super_mario_bros_u.html
When you put in a species character in a title like Smash Bros, they are representing their species. Yoshi represents the entire Yoshi species, Pikachu represents the entire Pikachu species, Luma represents the entire Luma species, etc. Individuality/personality doesn't matter when it comes to Smash Bros. during development. Most of that is left up to interpretation by the player; an example is SSE in Brawl where there are no spoken lines of dialogue and most of the story was left up to player's imaginations.
As for Bandana Dee being an "elite" member of his species, nowhere in the Kirby games is it stated he's any different than his fellow Waddle Dee beyond being an ally of Kirby and friends. The "he beats up other Waddles Dees!" isn't an answer. Other Waddle Dees have done the same thing when playable in Super Star(Ultra) and Canvas Curse.
And if design
did matter....then we would never have Luigi in Smash, who's generally been a palette swap of Mario with very slight changes since his conception as a character.
Also, take Kirby. Recolor him navy blue with white eyes and purple feet. Give him gloves, shoulder pads, a cape, a sword, and a mask. Who do you have? Meta Knight.
Yes, it's true that Luigi started out as a mere palette swap, but he was given a redesign for Super Mario Bros. 2 (USA). That design carried over and was used for Luigi's likeness in Nintendo's media/ads and future titles defining him as a separate character individually and design-wise before Smash 64 came out.
Luigi was defined as a Nintendo All-Star. He also has a unique name that isn't Green Mario.
As you listed, Meta Knight has more differences from Kirby than a simple palette swap or piece of clothing. He wasn't designed as derivative of Kirby' design, but having a mysterious resemblance in body shape and size. Like Luigi, he has enough difference in design to be considered unique. He also has a unique name rather than being called Masked Blue Kirby.
....Those are all palette swaps.
Palette swaps of (in Yoshi's case) other generic Yoshis in colors of the species itself and (in Link's case) a living manifestation of the darkness inside Link.
So is Bandanna Dee. He's literally Waddle Dee's design wearing a piece of clothing and a slight color tint depending on the game. Same with Yellow Toad and Blue Toad. Or Red Yoshi. Or Metal Mario. They're palette swaps of another character's design even if they a separate defined individual in their games. As you can see, derivative character's utilize a "color/clothing/power" "original character's name" naming scheme. That's just how character design works. Can a derivative character design get their own slot? Yes, see Dr. Mario. But would Dr. Mario get in over Mario?
Now don't get me wrong, I think Waddle Dee would be an interesting choice for Smash Bros. I just find it odd that his supporters claim he's extremely unique with a bandana on while also claiming he's boring and generic without one on. It's like if Toad supporter said Blue Toad is amazing looking while demonizing the classic Toad design.