So I was just recently thinking, using the limit that the DLC characters will be characters that are not present in Smash Ultimate in any way, shape, or form, and so far, I've only got a few in mind that can make sense, and have not yet been seen as spirits (to my knowledge), plus would seem like potential 'Nintendo' picks.
One of those characters that came to mind was Cross from Xenoblade X. While Elma is, more or less, the main character of the main story in the game, the game at large focuses on Cross/the Avatar. Smaller Side-Quest NPC's are mostly assumed to be talking to Cross, the bigger Kizuna/Affinity missions are focused on Cross as MC (and are arguably the core of the game experience) and the game-play is more centered on Cross as well, having access to all classes, move-sets, and is
absolutely required in the party at all times.
For Smash, Cross would benefit in having many different selectable skins/outfits across male and female similar to the Inklings. How far they'd go to customize each look, I don't know. I'd imagine a different face with each outfit/color across male and female would be a lot of work for the development team.
The other benefit of Cross is pulling a move-set from the full spectrum of Xenoblade X, instead of just one class. They could potentially add different voices for each skin as well.
The only negative side of Cross I'm thinking of is that... even for an avatar character, he/she is very void of personality/emotion. Even against other silent protags like Link, Villager, and the Inklings, outside of soul voices and battle cry's during game-play, within the story, Cross shows no character whatsoever. The player doesn't really have much tools to show their own personality within the story or side-missions either. The best that was given is a selection of two choices in some scenes that don't affect the outcome in any way. But within game-play, there is much more room given to the player to customize, emote, and generally give Cross some personality.
As for potential ongoing Xenoblade X lore, Cross has an unanswered mystery regarding his/her past and could link to even bigger mysteries within a larger story. For instance, Cross and Yelv may share a past in common and Yelv is present during the final mainstory cutscene in X alongside alternate Elma:
Cross would come with X's music composed by famed composer Hiroyuki Sawano (Attack on Titan), and have a stage from X with mechs as a possible stage hazard. None of these elements have been seen in Smash Ultimate at this time (that I'm aware of).