I am quoting this so you get a notification because I am selfish lol.
Could you point me to a set where you feel like you were playing especially well against Falco and or Peach (of equal or higher skill)?
I usually feel like I'm playing on point vs Mango, but I think he's just better than me overall. I don't recommend my set vs Westballz despite the attention it gets - I felt like I was the stronger player rather clearly at the time (no offense - West got a lot better since then) and other than some specific anti-pressure things, I don't really feel I did anything interesting or good in it.
My sets vs PP are ancient but they demonstrate some good stuff for Sheik vs Falco. Some of it is sadly outdated and I was lucky at some critical moments. I especially recommend the matches on Pokemon Stadium, Rainbow Cruise, and Battlefield. The YS matches were janky but jank is often a big factor so take that as you will.
Also, henceforth I'm adopting FGC methods of direction. I'm going to be using the number pad to refer to directional inputs, especially regarding DI, WD angles, Firefox angles, etc. I think this is a stronger system than the one we currently use and should communicate directions much better than what we currently use (away, behind, slightly behind, up and behind, etc). As a fun exercise, can you spot which input is often redundant in the previously mentioned DI inputs when referring to d-throw chain grabs? Also, we then have an input for neutral DI that follows a system and doesn't sound ******** - I call it, "5".
Anyway, onto more Sheik. To be frank, the Marth matchup is just how good you are at handling his dash dance into grab and how you manage your defensive options when you're caught in his juggles. Provided you don't get juggled from 20-100%+ on a single toss, your combos tend to outpace his if you understand roughly when it's appropriate to push him with your combo versus when it's okay to juggle him and keep him in the air. If they know to DI between 8-9, you have to be good at dash SH uair or accept your f-tilt / dash SH nair / fair into whatever those procure at that percent. Sometimes nair can link into jank dash attacks, so that can be good. M2K sometimes needles; his set vs PP is a good demo of some of the combo options on 8-9 DI.
The actual dash dance has me a bit stumped so I'll try to make this not sound ridiculous and work with what I know, not what I'm testing. Basically, Marth's dash dance transforms based on whether he can dash cancel or not; this means he kind of has two distances to his running space. Within his dash zone, he then has two more distances - short dash and long dash. The basic gist is that he has 3 major points on his running space in either direction. It might look something like this:
||(1)Run||------||(2)Long Dash||------------------------||(3)Short Dash||-------------------------||Marth||
And, of course, those points exist behind him mirrored. Marth's option pool varies for each of these positions.
Short & long dash -- Shield, Jump, Dash away, Grab, Dash attack, Side-B
Run (dash cancel) -- All of the above minus dash away but you add his normals (namely Down Tilt, Up Tilt, and Forward Smash)
This means that your relevant options change based on where he is (speaking in terms of relative proximity). Sadly, this is where I become less useful because I'm unsure of how to behave in these zones. That said, I can say with some confidence that if you lack a platform to needle cancel onto, jumping is really dangerous if you're far away from him at all because it's really easy for him to get under you with a launcher (since he has access to WD and his dash cancel at that point, enabling his normals [Up Tilt]). For this reason, a lot of people play heavy ground defense until they get closer and then they fish for grabs, grab setups (aerial into grab), or anti-air his aerials. This seems reasonable so far. Still no perfect answer for really solid close-range dash dance, but I'm not sure there is one either. Further research is required.
Working on new ground stuff. Maybe that's the answer. Will report later.