[I haven't read all ten pages of comments, so excuse me if this is redundant]
Increasing attendance, fundamentally, means getting new people to play the game. A national is a prospect for people who are already a part of the community to all get together in one place to play, whereas local tournaments deal with the same people (in the same region) playing and practicing with each other (and only each other, for the most part). Nationals pick from the pool of local regions for players - locals pick from a pool of similar-tasted (smash) individuals in a given area. If you can get more people to continually play at locals, you therefore get more people to go to nationals.
There seems, obviously, many ways to increase tournament attendance. However, there is more than just one domain (nationals) that needs to be considered, and, as you can tell, I'm talking about locals. Nationals are probably the easiest scene to increase attedance at - and from what I've read in the OP, you've got it down to a science - but it seems that the surge of attendance at a national would be much more superficial and short-lived than having local attendances increased.
So, how does a local smash community increase its numbers? To put it simply: committment. However, it's not a simple problem. There are many factors that have to be considered, such as 'region' size/population, proximity to other regions, age (average and distribution) of the smash community in the region, etc.
Locals aren't where the money is at - it's where people play for the love of the game. Hence, the goal is to get people to love the game. There are a few ways to do this. Directly, you can ask friends to play smash with you to try to get them into it, or post advertisements for your local tournament at/near game/movie stores (and/or at school/college/work, depending on if you have people in those domains or not) - this gives people a concrete visual/feeling of what the game is. Abstractly, you can host your tournaments at a game/movie store or at school/work (Vegas Melee hosts its tournaments in an arcade), or host a (semi)large party with friends (smash and non-smash) including a little smashfest in it, or post your favorite smash matches on FB/Twitter/whatever or to friends - this gives the perception that there is more to smash than just a game.
There is a African philosophy called Ubuntu that states "I am what I am because of who we all are." (or: "I am because we are, we are because I am.") I believe that the health of a community - whether it be smash, a city, or even the world - depends on following this philosophy. In the end, like I said earlier, it takes commitment. Players who want to get better can be committed to practicing everyday, but what happens when there is no one to play. The committment goes beyond your personal, selfish, subjective experience of the game - the committment, if you love the game, expands to the community itself and its health. A community becomes very unhealthy when a top player in it withholds information of matchups, or won't play friendlies with new players. A community becomes unhealthy when the only people included in the scene are the people who were already in it. A community dies when there is no one in it.
Yes, I realize that this doesn't necessarily go in accordance with the OP, but I felt that it was needed. And I also realize how abstract this is (on the local level) compared to how direct and concrete the OP is (on the national level) - they're both needed though.
What you present in the OP is great. I honestly don't have much input to it, other than I believe that the Elo system would be great for Smash (I'm currently using it for the Vegas Melee PR - not on SWF but you can check it out
here).
Great thread. Props.
Edit:
I believe that one of the key aspects to increasing the size of smash overlooked so far is the influence of local tourneys/smashfests. I believe that if local tournaments focus there efforts in recruiting as much as hosting a good tournament that the smash scene would benefit greatly. Often these tourneys are advertised on smashboards but I think more can be done. One way to recruit new players is posting flyers or signs in places like local game stops that you think you may find people interested. I feel that putting a sign out on the main road could even possibly help.
Seems that I did get a bit redundant. lol
