Based on what you saw during the Brawl days was years ago, Geno is even less relevant now, which means Cloud appeals to the target market even more.
Uhhhh, how does that make any sense? Geno being obscure has no baring on Cloud's acceptance. Maybe you meant relatively, Cloud would be more popular today than Geno? General interest (if measurable) would be constant, so Geno being obscure or not would have no baring on Cloud. You may want to rephrase that.
Super Mario RPG was already old when Brawl was released. Super Mario RPG came out in 1996. Brawl was released in 2008, 12 years later. So unless 19 years is the magic number where people stop caring, his popularity wouldn't change. But a big reason people stopped talking about Geno was his legal issues since he was owned by Square, not Nintendo. But let's look at today.
The late Shorts did quite a lot of polls during the pre-Smash 4 days. If you look at the poll's Geno's position varies, but he does well in a few of them. In the mid 2013 one, he was in the top 25. Sourcegaming's Perception of DLC in Japan (which I linked earlier) also had Geno in the top 20. Geno is always higher than Cloud on both. And again, Famitsu reader put Super Mario RPG at the 8th best Nintendo game of all time. So I don't think fans don't care about Geno. But he was a character that has been held back by legal issues that fans thought would always bar him.
But, again, my point is not that Cloud is unpopular. Its that Cloud is unpopular among the target audience. Its like trying to sell cheap perfume in a high class store. The cheap perfume may be a best seller, but not in the market you are trying to sell it in. The reaction to Geno would get folks excited, but the initial reaction would be "quieter." However, the difference is fans would have a more sustained interest because its a character that appeals to them. And there may be character choices that are better than Geno. I bring this up because I argue that if Nintendo was going to go through all the work of negotiating rights, why not do it for their own character. I think the only thing the Cloud announcement did well was it was shocking. No one seems to be saying how interesting his moves are or they are glad to play as them (save for, like, Maxamilian Dood). They are in it for the shock factor/ I would even argue that Nintendo dropped the ball and lost thousands of sales because they did not release Cloud on the same day.
To close, on your point.....what you said makes no sense. The target market is Nintendo fans, so why would they care about Cloud, a character who only graced their system through spin-offs. I don't think you understand who Smash is appealing to and why I can even say a smaller character like Geno is a better choice than Cloud, who is one of the biggest names in Final Fantasy. Master Cheif is a big name, but I can assure you fans would hate his inclusion because Nintendo fans don't care for Halo (or, at least they are less likely to play it since they would own Wii Us and not necessarily XBox Ones).