don't challenge falco's fair, just whiff punish it. if you're up close, jab is really good since it's better than falco's. falco is really slow on the ground, so you can abuse whiff punishing in general. this also lets you press the benefits of stage control when you get it even more. provided that you don't seriously mess up, you can attempt to hit him off-stage and subsequently gimp him with little risk. when falco uses phantasm, the hitbox is behind him, so any hitbox you put in front of him will land if timed properly.
edit: falco's forward smash reaches under the ledge and will never clank, so falcos that know what they're doing can 2 frame punish you on the ledge, so recovering low is dangerous.