Generally Sheik wins the mu vs Falcon but if he's really just rolling and f-smashing he definitely doesn't know what he's actually doing. F smash is super punishable with sooo many things. At low percents you can cc it and follow up with a grab or a quick aerial (nair, maybe a stomp, I'm not to sure on that one) or you can just shield it and shield grab, knee, stomp, bair, most anything out of shield.
Your dash dance is super effective here. There's little Sheik can do about it except throw needles and try to inch forward. You can use this or do something like dash, wavedash back to try to bait him into rolling, shielding, whatever and punish from there. I can't tell you much about how to punish better with Falcon, you're better off looking at the Falcon boards for that but when you play him I think it's better to play a little more patiently and try to look for openings in what he does. Sheik is a pretty good combo weight so once you learn the follow ups to grabs especially then you shouldn't have too many problems unless he learns his end of the mu bettter.