Alright, time for some counter arguments.
I know some people think its one huge meme to think Geno is more likely then other possible Square reps, but hear me out. I am personally of the belief Sora has little to no chance of happening. People really do forget just how much Disney plays a role in Kingdom Hearts, and with the non-video game characters rule, I really don't see how they would represent Kingdom Hearts well without the Disney representation, especially with how faithful all of the other DLC franchises are to their source material, and Kingdom Hearts content without the Disney stuff would be kinda lame
Sora is a weird one because in a way Sora's not competing with Geno, but Geno is competing with Sora. For example, it's totally possible for us to get Sora with Geno as a mii costume, but it's not possible that we get Geno with a Sora mii costume. So there is a "small" possibility we end up with both Sora and Geno in terms of the next Fighters Pass.
On the other hand, "it wouldn't be faithful to the series if there are no Disney characters" is a pretty weak argument. There's enough OC in Kingdom Hearts to make more then enough spirits/music, not to mention that Sora doesn't need Donald and Goofy to fight at all. It'd be no more then a stretch then say Joker doesn't properly represent Persona because he doesn't switch Persona's at all, and 99% of people kill Arsene 3 hours into the game. "Sora needs to come with Disney content" is usually used as a weak counterargument used to shut down Sora supporters, it's no different then the likes of "Geno is to irrelevant to be a fighter".
Do I think Sora is likely? No, not really. Disney would probably be annoying to work with, but do I think he's impossible? Well, Sakurai/Nintendo have already surprised me by getting DQ music into Smash when the composer is known to be a notorious douchebag. So far we've had Square's biggest franchises in Japan (FF and DQ) in Smash, and while KH is technically not Square; it is in a lot of ways their 3rd biggest franchise over there.
As for other Square characters, I doubt Crono since Square doesn't acknowledge Chrono Trigger at all anymore and I can't see us getting another Akira Toriyama-designed swordfighter again, especially as DLC.
I think Crono is super unlikely, so I agree. Sure, it's easy to give him a unique moveset; but the "charm" of the character is already covered by DQ heroes. That said, Crono music would be sweet and I think he should get a mii costume.
Sephiroth isn't happening because while he could promote FF7R, I just think other third-party franchises like Sonic or Mega Man should be the ones to get another rep, not Final Fantasy.
Alright I can see why Sonic should get another rep first, but Mega-Man? Sonic is at least bigger in terms of a multimedia franchise compared to Final Fantasy, and even if it has lost popularity in Japan; it's still decently popular. Mega-Man though? The character of Mega-Man is very iconic sure, but as a franchise it's not huge in terms of sales compared to either of them. Wikipedia puts it at around and 35 million sales. Meanwhile Sonic sits at 140 million sales.
On the other hand, Final Fantasy is sitting at around 155 million sales, and is definitely far more popular in Japan compared to either Mega-Man or Sonic. Even worldwide, as a games series; FF is definitely more popular then Sonic nowadays. Not to mention that Sephiroth is one of the most iconic villains in gaming, especially in Japan.
I doubt Neku due to reasons I have said in the past. I doubt Lara Croft is gonna happen because while she is an iconic character in the West, I heard Tomb Raider is not popular at all in Japan.
Agreed about Neku. The only way I can see him getting added is if they pull a Bayo, and add him in because they're helping fund a second game. But I expect him to get spirited/costumed more if they end up doing that. Tomb Raider has a very niche following in Japan nowadays, kind of like Crash; except Crash was popular in the 2000's. I can't really see them putting Lara Croft; but at the same time, it wouldn't be the first time we've gotten a character that is only popular in the West added to Smash. We did get Ridley, except he was at least 1st party and highly requested at that.
Agnes from Bravely Default is the only other Square character I could see besides Geno, and even then I still think Geno is more likely just because of the "evidence" that is in his favor.
I feel the same way about a Bravely Default character, as I feel about Neku. We could
technically get them in as a fighter, but I see them getting spirited/costumed more then being a fighter. That said, I doubt it would be Agnes as BD 2 looks like it has a completely new cast of characters.
So overall I agree with you, but I think you're dismissing Sora/Sephiroth a little too easily. I don't think Sora/Geno compete that much, and I can see a pass where both of them get in; that said, Geno is definitely competing with Sephiroth, and I don't see both of them getting in.