When it comes to diversity in Smash, there really is no clear and cut answer as to "who" might be added and fulfill such a gap in a game that celebrates a selection of amazing games and characters throughout the history of the industry. It's quite clear that there is a significant percentage of mascots and protagonists of different games that are straight, white male characters. Many characters seem to characterize the "dominant culture" (not using that as an offensive term, but as one that comes up in my field of education) as in, white characters, or ones that reflect other cultures, such as Japanese in the form of Ryu, Joker, and potentially others. Then, you have characters that have different sexualities within the game that separates them from the usual character you might see on the cover of a popular game.
Like the comic industry, there's a sort of circumstance we've found ourselves in where most heroes were straight, white men. Prior to Miles Morales, there was a striking difference in the number of white heroes to heroes of color. There may have been one here and there, but it was never at the same level. This has obviously changed over the years, but the gaming industry is basically scratching the surface of this. There are still few black protagonists or mascots, for example, in many games.
Certainly, skin color or sexual orientation is not the ONLY thing that folks necessarily latch onto when making connections to characters, but it can be a meaningful one. Seeing a character you can identify with is something that some folks might take for granted when there are many to choose from that meet that quota. For some, however, this is not the case.
Obviously, Smash's roster lacks a representation of people of color when considering characters that aren't asian. However, if you take a look at the source of the characters, it might explain why. There are far, far fewer characters of color compared to characters that mostly appear to be caucasian or asian in origin. In my opinion, this is somewhat similar to the source material that Fire Emblem provides; there are a lot of protagonists that are blue haired, sword users. (Something to consider: Blue hair might be a norm to coincide with the player team usually being the color blue). If the source material doesn't change, it's makes it difficult to pull relevant choices.
As it stands, Elma (Xenoblade Chronicles X), Marina (Splatoon 2) and Twintelle (ARMS) are among the most notable black gaming characters that Nintendo has introduced in the last handful of years. Based on precedent and the way Nintendo has typically chosen their characters with Smash, we could end up in a scenario in which none of those characters are added, and Smash Ultimate caps off the greatest fighting game crossover roster without a single black default character. Women of color also present a great opportunity to representation, as women of color are often left out the most in popular media.
There are options within the game, and additional possibilities. For example, there are alternate colors for Inkling and Villager that have dark skin, and 2B is known for having an alternative skin in different appearances where she wears a white dress and is black. These are options, but they do not embody the existence of a black American, for example, who cannot simply change their look at the click of a button.
Lastly, we received essentially ONE female character in Volume 1 of Ultimate DLC, and that female character shared the spot with a male counterpart. Jill Valentine (Resident Evil) who is one of the most iconic female gaming characters out there is basically out of the running. Lara Croft (Tomb Raider, Square Enix), 2B (NieR Automata, Square Enix), are just two options of female characters that still have a solid shot of crossing over, in my humble opinion. Tracer (Overwatch) is an LGBTQ character, and lends representation that way.
Overall, I would put it this way: Nobody is wrong for wanting a character who they identify with because of the race or sexual orientation or gender of that character. That's a valid way of connecting to a character. That said, I'm not entirely sure of how much of a role it plays in character selection considering the first pass of characters we got. This is not a diss toward the first pass; while it was largely male, the first pass was excellent in value and bringing in new content.
Simply put: Representation matters, but when it comes to Smash, the source the characters are pulled from (game industry) makes things harder to accomplish this with, especially when business decisions are often dictated by the cash. Elma isn't necessarily "relevant", Marina doesn't seem to have much of a shot either, and then Twintelle has direct competition with Spring Man and Min-Min. I'm not trying to shift the blame from Nintendo, rather bring to light the simple fact that the industry, especially the Eastern industry, has not created many mascots that reflected appearances other than caucasian or asian.
From my perspective, I hope that folks who are searching for that character to identify with find that character by the end of DLC, whether it is through the character they want or another that grows on them.
Lastly, lastly: I do not agree with shaming people who want male characters, as those users likely have a connection to those characters themselves. But that goes both ways. I think it's obvious that diversity isn't necessarily the "top priority" in these picks, otherwise pass 1 would have looked mighty different. But that doesn't mean to shoot down another person's preference or trying to invalidate why they want the characters they want, nor does it mean that diversity isn't important.