Updated roster with reasons
Reasons
Bowser Jr./Shadow Mario: Jr. is now an integral part of super mario franchise and is now considered a main antagonist, he has pretty much been one since sunshine so I think he finally deserves his spot in the sun, he will also be the mario franchises only MAIN addition.
King Boo: Since King Boo has consistently been luigi's villian in the luigis mansion games I think he deserves a spot, also gives luigi more recognition as his own character (this is the year of luigi after all.)
Waluigi: he is warios brother (technically not confirmed but hopefully will be) and more importantly luigis rival, he is the only shadow of a shadow, he was popular enough to warrant an assist trophy for brawl and would be a very entertaining/troll character, its almost a bonus that he doesnt even have his own game yet because it makes him even more pathetic lol.
Paper Mario: He is the main character of his unrepresented franchise with plenty of game entrants, he would bring a unique playstyle to the table, and is very popular.
Geno: The most popular of the mario rpg characters, he would be the first of two characters from the beloved super mario rpg games, he is iconic to that game and would deliver an interesting moveset as well as rep everyone's favorite classic. (character model would be redesigned similar to pits.)
Mallow: He is alot less popular than geno of the smrpg characters but I feel they should come as a package, geno and mallow feel inseparable as characters and I feel if square were to allow one then the other would follow, he would also have a great move set as well. (character model would be redesigned similar to pits.)
Mewtwo: One of the most wanted characters for ssb and a oddly cut veteran, he is iconic as hell and can offer a great moveset (but it needs to be reworked from melee), he is also relevant as he is receiving an apparently new form, this form I would also like incorporate into the game possibly through a set condition mid battle (not an item like the smash ball) this would be up to sakurai but I think it is very important that BOTH forms of mewtwo are included. (the transformation counts as the 6th generation rep).
Blue: The Ideal of the pokemon trainer (or red) that sakurai came up with was a great ideal to represent other less iconic pokemon, the trainer options allows you to represent different pokemon generations and types, blue is the second most iconic trainer to the pokemon franchise so I found him to be naturally the second pokemon trainer, his 3 pokemon need to consist of a 2nd gen, 3rd gen, and 5th gen pokemon, and 3 different types not used in the game (ex. Ice, Dark, poison), this trainer would help further represent the entire pokemon franchise as a whole.
Skull Kid: He is the main antagonist of the Majoras Mask game, he is pretty popular and would help represent this zelda game, (zelda games as a whole are being represented in this game) he offers a unique moveset (possibly vega mask fall of style?) that would further show of how important the zelda franchise is.
Ghirahim: He is undoubtedly the most popular skyward sword character and is a character that could possibly return later to the series, he is the spirit inside the almight demises sword and battles you several times throughout skyward sword with a plethora of different attacks, he is almost a shoe in.
Demise: He is the next most important zelda character in the franchise next to link, zelda and ganon, he is the reason for the zelda series to exist and is extremely cool, he sword/lightning/ghirahim wielding makes for a perfect character addition, expect this character to appear again in the franchise.
Midna (and wolf link but the announcer will just say midna): She is the most iconic character from twilight princess, she is ruler of the twilight zone and would have a unique moveset while riding on wolf link, she is almost as popular as skull kid and is another great way represent the zelda franchise as a whole.
Issac: He is very popular and would represent the golden sun franchise which currently has no reps, he was an assist trophy in brawl and would offer an interesting psy/earthy moveset, no one should object his addition.
Palutena: The leader of pit who has been recently popularized thanks to the new Kid Icarus game would be a great way to further represent the growing franchise.
Shulk: The main character of the new and highly sought after xenoblade franchise, he has grown in popularity thanks to xenoblade being finally ported and would be the first rep in a good new franchise.
Diddy and Dixie: Dixie is extremely iconic and very popular thanks to the dkc games, she is most known for teaming up with diddy in dkc2 and thats what she would be doing in this game, the bannana move from diddy kong is now given to dixie but replaced with the classic Switch Clap so you can tag in Diddy or Dixie depending who you are, this would satisfy dixie fans while staying true to her character.
King K. Rool: An Extremely popular character, the main villian of the dkc franchise and hes a freaking king crocadile, not much needs to be said he is the obvious next choice for a donkey kong representative and it wouldnt be surprising to see him appear in dkcr2.
Jill: A character popular enough to get her own assist trophy and is from franchise drill dozer (a game that was made from the creators of pokemon) that has no representative what so ever, she would rep a great virtually underrated nintendo Ip while offering an interesting drill moveset, (heck the game might even get a sequel due to her inclusion.)
Starfy: Another character that was popular enough to get an assist trophy, is the main character from an un repped good nintendo franchise, possibly could be used as a marketing tool to allow ports of the older starfy games to come over.
Dark Samus: A pretty popular metroid character from the metroid prime series, and is basically the main antagonist of the prime series, she would be designed by using in game moves to make sure she was not a clone.
Ridley: The most or second most popular character to be included, the main antagonist of metroid as a whole, was a boss in brawl, is a kickass space dragon thing.
Saki: The main character of the original sin and punishment franchise as well as isa's father, was popular enough to become an assist trophy, is very popular in japan, and would represent an unsung great nintendo franchise.
Tom Nook: He is the most iconic character of the animal crossing franchise and is the best to represent an extremely popular unrepresented franchise.
Ray: Was popular enough to get his own assist trophy, really popular in japan, is currently the most iconic character in the custom robo franchise, and would represent another great unsung nintendo franchise.
Krystal: A popular character who is the main protagonists love interest, she had a game that centered around saving her, she is a telepathic, she also has a really awesome staff that leads to a great movelist overall and is the optimal next star fox character choice.
Lyn: A popular fire emblem character that was deemed worthy enough to get an assist trophy, she is the main antagonist from the first american release for the fire emblem series, she kicks butt and thats about it.
Roy: Another very popular fire emblem character who is a cut veteran, he has also been included in the new fire emblem game (i believe dlc), his moveset would be entirely reworked to unclone him.
Takamaru: My first retro choice who has sprung up in popularity recently (maybe due to nintendo land), popular in japan, would help close out the retro section.
Porky: The main antagonist of the mother series and was a boss battle in ssb, he moves in a spiderlike robot so expect his moveset to be extremely unique, his theme is dope.
Little Mac: A very popular ex retro character who would represent the great punch out series, so popular he got his own assist trophy, would be the most normal character in the game.
Balloon Fighter: My second retro choice to represent the old balloon fighter game, his floating gamestyle would be very interesting, im sure his moveset would be very creative. (also known through nintendo land like takamaru).
Samurai Goroh: Finally a second rep for the F Zero franchise, he is captain falcons rival, he was popular enough to get an assist trophy.
Black Shadow: The main antagonist of Captain Falcon and the F zero franchise, he is also pretty popular and leaves room for a moveset that can be played around with (similar to how the captain was).
Megaman: The most popular 3rd party character that has not been included, the nes was megamans original home and what he is known for best, capcom has had a great relationship with nintendo over the years, its around his 25th anniversary.
Pac-Man: The most iconic character for namco, namco is working on ssb4 with sakurai.
Rayman: Ubisoft has had a great relationship with nintendo and the optimal version of rayman legends is coming out for wii U.
Sora: He has several games on nintendo platforms, Is currently squares most iconic figure (after cloud/sephi), and would come as a bundle deal along with Geno and Mallow.
Current Veterans to get extreme reworkings are (Lucario, Falco, Toon Link, Ganondorf, Lucas)