Truth is, you're right. Geno has fallen into the world of obscurity as far as game developers go. What games have Geno appeared in? Mario RPG, which is going on its second decade in age, and a very minor cameo in Mario & Luigi: Superstar Saga. At the end of the latter game, the credits specifically stated the Geno's rights are owned by Square-Enix. When one puts 2 and 2 together, and given how rarely he ever appears in a game, Geno's chances are grim. Unless Nintendo gets Square to rep a character, then perhaps Geno has a chance. Even then, Geno faces competition from other Square characters, including Black Mage, Cecil Harvey, Terra Bradford, and even some Dragon Quest characters. Unless the demand for Geno by fans are astronomically high, it's doubtful we'll see Geno grace a Smash game in playable form unless the fan base works their ***es off to get the message to Nintendo... That, and having a stroke of serendipity wouldn't hurt either.
Now, that said, this thread shouldn't be so much a debate on his chances of being in Smash 4 more than it should be a discussion for possible movesets, stages, music, etc..
Here's a bit of trivia: The theme played in the Lost Woods (I forget the name of the track. Something about "mushrooms") was originally going to be in Brawl. You can find and hear the track on YouTube. For some reason (possibly copyright), it was never used in the final game. Take that for what it is.