It's also just a reality that a lot of the support for first parties has collapsed during the Ultimate speculation cycle. Look at any more recent poll, and they're still dominated by third parties because people are just more interested in them (and not because "they're considered more likely," people genuinely support these characters). Nintendo is paying attention to how these things play out in regards to sales and attention, and it's clear that third parties have proved themselves to be successful picks for Smash vs a great deal of the first parties at this point.
Each one of those characters can be analyzed on an individual basis and see why they didn't get into the game, base or DLC:
- ARMS - An unproven IP at the time the design documents was drafted and a game that largely skated by on being an early Switch title when there was little else to play. It has honestly been comparable to 1-2 Switch in regards of the floor just falling out from under the game and it has proven to be the opposite of an evergreen title for Nintendo. It's not clear if ARMS has much of a future at all even if the game was generally a success during 2017.
- Rhythm Heaven - The series has never been a huge series for Nintendo and it just doesn't have a massive fan base really pushing for it. It has fans, but nothing to the degree that we see with those big ballot winners like Ridley and King K. Rool. And the series has not managed to show any improvement at all in regards to sales or even public consciousness since the DS release and has generally fallen further and further off the radar.
- Kirby - It's not clear that Sakurai sees the same need to represent modern Kirby that Kirby fans are determined to see. Sakurai seems more than happy to keep giving Kirby additional content through other means besides characters as well, and it's really doubtful that Sakurai cares about the whole "characters first" mentality that fans are so frequently using in the first place.
- Zelda - There has never been a consensus in regards to who people want. It has changed significantly with every Smash release, and the only consistent idea that Zelda fans seem to have been able to rally behind was "Ganondorf with a sword." It's clear that organized support campaigns for a single character are far more successful than a generalized "more of this franchise" type push. Again, the Zelda series also got a huge amount of love through other means than playable characters with redesigns, music, one of two franchises to get a brand new stage, etc.
- Dixie Kong - Fans pushed for King K. Rool by a pretty wide margin, so he was chosen over her. And then they didn't exactly flock back to Dixie Kong after that. She may be a more notable icon in many ways than most other Nintendo characters missing, but the DK fan base doesn't seem to have gravitated towards her in any meaningful ways really.
- Krystal - Her support collapsed post Brawl and has never been able to recover, nor has she made any appearances since then. It's pretty easy to see why she wasn't included.
- WarioWare - The series has never had strong support for a character until Ashley got her month of fame in 2018, only to also completely collapse in the wake of the August Direct and her "deconfirmation." WarioWare has also largely become less and less relevant and popular as a series, so that sort of trend isn't going to inspire a new character.
- Chibi-Robo - Nintendo literally killed him and his series over the course of the past decade lol. And he just doesn't have the fan support to make up for that massive issue either.
The issue is that many of these options just don't have the support they need to be a big enough deal to the community, especially now that third party characters are not only seen as entirely realistic, but the preferred option by much of the fan base. Base Ultimate had extremely limited "slots" for newcomers, and the Nintendo characters occupied 5 of those 6 unique newcomers pushing recent characters and fan demanded ones with a "fun" Piranha Plant DLC later on. Sakurai really did try to give people what they wanted in the major ways base game from the Nintendo side of things within the limits of Ultimate's necessary lower additions. And I think it's especially important to consider the fact that Sakurai doesn't see Smash the same way fans do. He's not committed to the characters "first" mentality and sees all representation as important and relevant.
Don't get me wrong, I'd love to see Dixie Kong, Chibi-Robo, and a Rhythm Heaven character in Smash. They'd be great options if we have to go to first party options for any reason... but it's easy to see why these characters haven't made it in during the Ultimate cycle I think. Kirby I'll give a little more room to as something that could end up with another character, specifically because Bandanna Dee is one of the few first parties to maintain his base in the post Fighter's Pass world and Dixie Kong could also easily see a "bonus character" type situation since she can be based off of Diddy to some extent. I don't think first parties are impossible, I just do think Nintendo has turned their focus largely elsewhere due to the success of third party DLC and for me personally, despite liking several first parties, I'm just less interested in them compared to most third parties that also seem so much more ambitious and I'm just more interested in seeing Smash continue to expand its scope and go out of its way to become this "museum of Japanese gaming."