If the dress exceeding polygon limits is what's preventing Peach, Zelda, Daisy, etc. from being added, maybe they could go with incarnations that wear either short skirts or trouser type outfits instead of the full length dress. (Basically any models that have legs instead of dress, just like the trouser wearing Mario, Luigi, Link, etc).
Now the most famous examples would be the Mario Kart biker suits for Peach and Daisy and the BOTW/TOTK trouser outfit for Zelda.
But this would obviously be way off period and after the N64 era, so in order to look for more period appropriate incarnations/costumes, we could go for the Mario Tennis/Mario Golf sports outfits for Peach and Daisy, which even have N64 models already. I'm presuming the short skirts wouldn't exceed the polygon limits like the full length dress would for the N64.
Zelda's a little more difficult since there aren't really any sports titles for the series, and very few mainline games have her without the full length dress during the N64 era or before, so we would have to look a little further into the spinoffs or cartoon shows. I've found that probably the most well known incarnations of her with either trousers or short skirts would either be the CD-I Zelda or the DIC Cartoon Zelda. (It would not only be a funny meme addition, but the CD-I games and DIC cartoon both had Zelda in a more active role than the mainline games at the time, so it would be fitting too).
Obviously at the end of the day, I would prefer their traditional full dress incarnations from Super Mario 64/Mario Party/Mario Kart and Ocarina of Time, but if they really can't get around the polygon limitations, these would be acceptable alternatives to not having them in the game at all, considering their importance.