My editor and I have been tirelessly working on getting this bad boy out over the last several weeks. I'd love it if you guys gave it a watch and hit me with some (respectful) feedback.
First things first: Your voice is very soothing to listen to and easy to understand. That makes me want to watch the rest of the video to hear what you have to say.
Now for the character discussion. I wholeheartedly agree with your cuts. Taz, Stripe, Morty, Black Adam, and Lebron should wait a while before getting the invitation. Hopefully later than sooner in Lebron's case. Despite that, I would actually think Morty should be more on Taz's level of "could be brought back after a fuller roster", rather than being a background cameo. Even as someone who's never seen the show, I have a feeling you can do something unique with the titular deutragonist.
As for the characters you did include as newcomers, I think you did a great job with them. Daffy Duck, Raven, Samurai Jack, Fred Flintstone, King Kong, Ben Tennyson, Scorpion, Willy Wonka, The Wicked Witch, Ruby Rose, Gandalf, and even Hermoine make up a cast of absolute no-brainers for this base roster. I'd even say it makes the five you managed to cut look even MORE like business-focused deadweight. Specifically, your takes on Daffy and Ben are quite good.
Your stage additions are just as fun as the new characters. My personal favorites are the Empire State Building with its 30s film reel aesthetic, The Cat Concerto, Titans Tower, and Rock Vegas. The last one took some research to see if it was actually in the original Flintstones show, but turns out it is, so I'm cool with it.
In your take on Season 1, we have Aquaman, Beetlejuice, Brock Samson, Wile E. Coyote, Dean Winchester, and Weiss Schnee. A major facet of DC history, one of the all-time best Looney Tunes, a 2000's Adult Swim rep, a second RWBY rep, and the introductions of Beetlejuice and Supernatural into the MultiVersus universe. I'd gravitate towards Aquaman, Beetlejuice, and Wile E. first, but Brock and Dean would make their fans extremely happy while filling in some particular niches. And while I'm not as aware of Rooster Teeth as the next online user, including another fighter from RWBY does take advantage of the game's gimmick of 2v2 matchups.
Season 2 includes Sam Winchester, The Powerpuff Girls, The Joker, Aragorn, Dexter, and Pennywise. Honestly, the biggest issue I have with this is having all three Powerpuffs share a single slot. But like Daggett and Norbert, I guess your portrayal of how they'd fight is better than nothing, also like Daggett and Norbert. The other fighters are absolutely good, like The Joker, Dexter, and Pennywise.
The third and final season you have in your video chooses to go out with a bang with Neo, Green Lantern, the Aqua Teen Hunger Force, Kevin Levin, KO, and Kramer. I'm not mad with your interpretation on the ATHF, a Matrix character is long overdue, and KO fits as well here as Scorpion did in the base game. The problem? With how you were hyping up Kramer, I legit thought it was going to end on Steve Urkel, as you can apply your hints to the poster child of TGIF the same way you did for Seinfeld's friend.
One final note on the characters, once I've seen the full roster thus far: Somehow, the roster alignment just flows with relative ease. DC characters occupying the top left corner, Cartoon Network characters acting as the rest of the top border, Hermoine being placed between Bugs and Shaggy, Sam and Dean taking up their own row entirely, etc.
Now, would I have loved to see more characters? Absolutely. In fact, going five seasons without Scooby-Doo in any of the roster slots is becoming a cardinal sin that should have been rectified a long time ago. Getting Courage before Scooby should be a sign of concern IMO.
But, to answer your initial question, I'd say this is a vast improvement over the roster we actually have.
Sorry for the long reply, but I tend to do that sometimes.