Huh, now that you mention it, the only character that truly got into Smash in recent memory solely based on Japan popularity and importance was Hero from Dragon Quest right? Even then we get Cloud from Final Fantasy first.
"Sakurai: At the same time, I think it’s only natural to prioritize the character who enjoys worldwide popularity. I might have had misgivings if Cloud had never appeared on a Nintendo console in any form, though."
Even Terry had more than Japanese importance, he's big in some Latin American countries and is a part of a game that inspired Smash. We mostly see characters that get in favoring the West like Samus, Little Mac, Bayonetta, Ridley, King K Rool, Banjo, etc. Other characters are usually worldwide in terms of their overall popularity like Sephiroth, Steve, or Pyra. It's very rare to see characters solely targeting Japan unless I'm missing something crucial?
I could still see Touhou happening but only mainly since there are no characters that would truly make more sense for the kind of niche indie bullet hell theme she fits in for. Unless they actually add Frisk from Undertale or something else I'm not sure about is still in the running.
Maybe someone like Arle from PuyoPuyo is chosen instead as she's a young magical girl who has more popularity outside of Japan?