How about that:
Can you see the ground where the character-whose-name-I-don't-really-remember-and-I-feel-totally-bad-for-it is standing? It's the main platform, floating ove the park.
Here's the deal: Mr. Whatshisname doesn't really pull the blocks. He sits there, in front[or beside, I don't care] of the stage, watching the match.
As the fight progresses, some pop-out buttons[I'll call them that way. It's those buttons that pull a specific color all the way out.] appear on the ground.
If they're pressed, the blocks of its color pop out.
If you're in front of the block, you receive minor damage and knockback up[or maybe down, if you're in the air].
The blocks work as walls, platforms etc.
From time to time, the little nameless dude runs to the button in front of the stage and presses it, emptying the stage, restarting it.
Something like that. The cool part of that is: The stage could be a different image everytime you play it!