Advertising or no, the fact remains that they hold open a slot specifically for a recent Pokémon, and this causes problems because they're intentionally disregarding a whole load of characters just to fulfill a pinpointed quota. The question is no longer "which Nintendo character has the best merits" but rather "which among a small subset of Nintendo characters, each of which we know little about and have no guarantee of their popularity, has the best merits."
In the case of Incineroar, the wrestling attribute has nothing to do with whether or not Gen 7 was getting a rep. Gen 7 was getting a rep regardless of how well Incineroar and Decidueye specifically appealed to Sakurai. Sakurai knew that out of the dozens of new mons added in Gen 7, he'd be able to make a moveset for at least one and so he made a quota for it. At best, the wrestling attribute was why Incineroar was picked over Decidueye. That's pretty much it.
As to why Sakurai only considered these two, we can guess that Primarina was considered less feasible to represent properly and, more crucially, they only considered starters because they were the safest bets. And this is part of the problem; it's hard to know which characters will be the most popular and iconic before the game releases, so they have to guess. In this scenario, it makes sense to only consider starters because they're almost surely going to have at least modest popularity. You could also argue that the concept art for starters might be done before other mons, but in this case you have the same problem of restricting yourself to a small subset of the possible choices by committing to something too recent. And again, given that you're already committed to picking a new Pokémon, restricting to starters makes at least some sense, but having to narrow it down like this is part of the problem of picking characters when they're too recent. You might miss a really iconic character because of it.
For example, a lot of really awesome Gen 3 mons got entirely skipped over because of the number of years there were between Melee and Brawl. But thankfully there isn't a single Gen 3 mon that stands head and shoulders above the rest (at least in my view of it, although there are a handful of really good choices and it's a shame we couldn't get even one) and at least Lucario worked out, so we still got something decent in exchange for that oversight. And in theory, a standout Gen 3 mon could hypothetically still be added in a Smash game after Brawl, but the continued restriction of only picking the most recent pretty much blots out this possibility. And it's not just with Gen 3 of Pokémon; it's other stuff like Golden Sun and Fire Emblem 7 that get killed by this faulty decision-making process. ARMS and Xenoblade Chronicles 2 got ousted by this as well; they may have been too recent for the base roster and that's all fine and dandy, but there's no reason that they couldn't be added in DLC or, if DLC was decided too early as well, a future Smash game. However, both Spring Man and Rex are probably going to be pretty unlikely for a hypothetical Smash 6, bar another appearance of either between now and then, and it's because of this recency bias. They won't be the newest anymore, and will likely be ignored unless they get another appearance somehow. Basically, "bad timing" is a poor excuse for excluding a character; it's nothing that can't be rectified later, but unfortunately Sakurai and Nintendo refuse to do so in many cases.
Finally, Sakurai's words on Incineroar:
"When planning began around December of 2015, I had resolved that I had to have all kinds of fighters in the game. Generally, though, I can’t really add a character from a game that hasn’t come out yet to the roster… So, I left one character frame open for Pokémon, and after Pokémon: Ultra Sun and Ultra Moon came out I took another look at it. That resulted in Incineroar being chosen. I wanted to try making a pro-wrestler type character at least once!"
There's pretty much nothing here to suggest that he gave himself a way to wiggle out of the commitment to adding a Gen 7 Pokémon. And, at least in the way that I interpret this particular translation, the wrestler statement was kind of a throw-in interjection just to add a little bit to the justification. It's basically like saying "plus the character's cool, so try him out!" There's no guarantee from this statement that the wrestler attribute had much to do with the choice at all; at best it helped Incineroar get chosen over Decidueye.
Edit: when I say that there's no single Gen 3 mon that stands out, I mean that there's a lot of good choices and so support hasn't rallied around a single one, which is not to say that no Gen 3 mon deserves to be repped
