Shadow is Sonic's Vegeta. Knuckles is Sonic's Piccolo. Tails is Sonic's Krillin/Kuririn, except a whole lot more effective.
Anyway, as for the topic at hand. Sonic may be in story mode, but I doubt that he's going to be as important in SE as everyone keeps speculating. Remember that Sonic is a guest character; as popular as he is and as much as we all love him, he isn't one of the stars of this game, the Nintendo Characters are. I'd be extremely surprised (and, honestly, a bit disappointed) if final battle turned out to be Sonic climactically overcoming the final boss.
Of course, he'll definitely be part of the team and be in story mode. There may be part with him as the protagonist, or there may not (until I saw him in that video I thought the 3rd Party Characters were going to be excluded from SE, I was proven wrong, i suppose). I can' t wait to see what a Sonic themed SE stage will look like.
And, of course, since there's team mode (it seems that you can use anyone whose stage you've already encountered, or something like that, but the main character is dictated by plot), you can do that climactic final battle if you want to, but I don't think it's going to be guided that way by plot and cutscene.
I've always loved Sonic and the Sonic games, but as much as I like the character, I definitely don't think they're going to let him steal the show. It just doesn't make sense given the game.