Ultimately, they don't want to give favoritism to any specific series. It makes sense why the core villain is an OC. This ties things better together overall. It doesn't make sense for a Villain to suddenly be this powerful in a Nintendo Crossover. It's also not a premise where everyone is the "original version". They're some kind of Toy to begin with.
Thus, somebody had to bring them to that world. And it can't be anyone from a normal Nintendo world, otherwise the premise 100% fails. The OC angle was from Smash 64. This doesn't mean every OC is that great. Tabuu was fairly boring due to a major lack of storytelling. On the other hand, it wasn't so bad in Ultimate as we got at least one of them front and center. Besides, as noted, they constantly do this with crossovers. Since there's too many unique franchises, trying to fuse characters into one OC is even less plausible. It was doable in something like Marvel VS Capcom(though admittedly fusing two Marvel characters wasn't all that fair, but the roster is... awkward in Clash of the Superheroes. To be fair, it always had an awkward roster. On the other hand, this worked rather well with Mortal Kombat VS DC Universe due to a better roster distribution).
As I noted before, Tabuu is the only one that's kind of... weird. Whereas the others make sense. Giga Bowser is a special boss in Adventure Mode that is a unique transformation to Smash Bowser, but is explicitly a different Bowser to justify it. He's not nearly as bad as Tabuu, if only due to borrowing from the Giant Bowser design. Crazy Hand is the destroyer of the universe, whereas Master Hand is the creator. Tabuu has no clear point to him and just kind of exists. And that's not counting the other random bosses, though frankly the normal ones(I.E. Ridley) also came out of nowhere in the SSE. Due to a major lack of storytelling, they just existed. Only the playable characters generally had some story to them, along with a bit of Master Hand and slightly on Tabuu(and the OC bosses also had a tiny bit of story behind them too, more than the other kinds of bosses, who existed for no reason other than to exist).
Ultimate on the other hand justifies every single boss battle by them being a unique entity in the Smash Universe(which we already knew since Giga Bowser, and even moreso when Samus and Zero Suit Samus split apart). It goes with a clear storytelling of "they're all specific characters in a story, including those who should theoretically be the same person. But they're not, because we're looking at the full character aspect. Also, yes, a species has individual members that count as different people. Don't question it too much". It's convoluted, but that's how toys are anyway. You buy a toy of the same guy? Different figure, etc. It's really the same concept come to life. The only time they don't justify anything is the "8 or so costumes" angle. And that's mostly just... toys.
As for Dharkon and Galeem, they share some factors with Crazy Hand and Master Hand respectively. They're like Titans to their Gods, if you will. They both seek to destroy overall, but Dharkon just wants to obliterate it all and create corrupted versions. Whereas Galeem has the same goal, but to make it in his own image(and is called the Lord of Light to boot). So it's basically an evil version of Dark VS Light here. Master Hand VS Crazy Hand isn't much better overall, but they both actually do become heroic later on. Ultimate ensured that, but also, Master Hand was on the Heroes' side in the SSE overall. Crazy Hand for whatever reason didn't appear in the SSE, but that's probably due to a lack of time or story ideas.