Why Wolf was cut from Sm4sh or made DLC remains unknown.
Lower priority due to Star Fox getting no new games soon, same reason Lucas was cut. Keeping in mind that Sakurai has been willing to cut Mother characters more than once, the fact the series is finished isn't helping either. It wasn't even finished during Melee and he was already getting ready to replace Ness with the Mother 64 protagonist, and almost did it again during Brawl, but the lack of Mother 3's English release made him change his mind on how to do things. It's pretty safe to say that Ness being a veteran from Smash 64 started to give him a bit leeway in who is "more important to keep" for Sakurai by the time of 4. Who knows how he feels on other ones. Like maybe Jigglypuff is simply higher priority for him to keep than some Pokemon in general. Or it's cause it's very easy to remake the puffball. Pokemon Trainer is one thing, who got mostly cut due to the 3DS, but Brawl not having Mewtwo is another story. I'll explain why Mewtwo made sense as Smash DLC down below(also, he was someone Sakurai knew was impossible for base for the same reason).
Lucas actually was one of the most popular Brawl veterans to come back. Veterans are generally immensely popular. Worth noting that Roy was the Melee veteran, while Mewtwo was "most popular veteran, period". That's why we don't have two Brawl vets, despite it being fairly easy to remake Wolf, since the data was entirely there anyway from Brawl(Mewtwo had no usable data, since it only existed in Melee beyond a few tiny things that were done in Brawl), because there was not "two Melee vets" for how he was doing things. One fan favorite veteran for all time, one Melee vet, one Brawl vet, and 4 newcomers, each having their own unique thing to bring to the table.
Wolf's other core thing is that Star Fox Zero kept getting delayed as well, which did not help making it easier for him to return. Since they could easily promote Zero a bit, since it's an upcoming game he's in at the time(him not having an upcoming game soon enough is part of why he got cut after all). Star Fox was continuing to get games, while Mother is finished, which puts them in different situations overall. So despite a similar reason for the cuts, they have very different reasons for justifying getting new or returning characters. Come Ultimate and there's no newcomers from either series, as no new game, though you can partially blame that on Zero having no actual unique newcomer options. If Krystal was in, she might've been given more consideration. She may have been considered for Ultimate, but her fate in the series is too unknown, so she'd be lower priority than characters who are far more likely to return, I.E. Isabelle. And other obviously were massively requested from the ballot, regardless of getting a new game they're actually in or not(both Belmonts, King K. Rool, Dark Samus, Chrom. It was obvious Ridley was going to continue to get used, and he's been in constant use anyway. Chrom might be somewhat debatable, due to the cameos that constantly come up. Daisy is definitely going to show up in more Mario games, so. But she also wasn't noted as a "highly requested character", so whether she actually got in due to the ballot is hard to say. Dark Samus and Chrom were noted for massive requests, so can be implied were being noted as ballot characters too).