For what it's worth Taito operates very independently from SE and handles their own licensing so I wonder how the Smash team sees that, but yeah I understand what you're getting at here. It's the curse of company acquisitions in a Smash context, really - it's like how Sol and Kunio appeal to completely different crowds and by no means should have to compete with each other, but they'll have to anyway since ArcSys bought Technos. As for characters, I really do think Bub/Bob are the way to go here - they have that perfect combination of genuine icon status and gameplay viability where other Taito characters fail in one aspect or another. They are absolutely The Ones. After that.....eh, I'd be fine if we left it at that. Taito's back catalogue does have a lot of really fun characters, and plenty of them have become somewhat mainstays in the company's history by way of crossovers and the like, but the vast majority of them just aren't the kind of thing Smash goes for. We're not ever seeing Reika Kirishima, yknow?
As for the SNK comparison, yeah - I think one of the reasons I've been pulling for this so much is, in my view, divorced from Squeenix, Taito are basically the perfect next SNK. Influential but overlooked while still being just popular enough to get a nod compared to more niche names, have a really interesting depth of catalogue that would be great to show off, they just feel right as an inclusion to me. Hell, they're definitely bigger than SNK, I'd say. As for the potential of other SNK-style picks......well, in terms of arcade companies at the very least, I don't know that any others reach the same level. One time, I went through the famous Gamest magazine's yearly awards, and joined together each year's vote standings for "favorite arcade company" - when it was all laid out and tallied up, there were 6 companies that were head-and-shoulders ahead of the rest: Capcom, Namco, SEGA, Taito, Konami and SNK. Of those, only Taito is missing, and after that is when you get to the more "cult favorite" development houses that I think would be best represented by side content. Maybe they could do something like Cave? IDK.