If I'm being honest, a Smash movie is something I'd love to see. I'm really happy to know Nintendo is actually considering it. I would also love movies of Star Fox and Kid Icarus. I even have an idea for a movie trilogy based on Kid Icarus, that I developed with my friend. And Star Fox is a no brainer, the series is quite cinematic as is and Assault in particular felt like a movie, and the franchise is often praised for it's well written and lovable character, so it would transfer over perfectly.
In terms of this take though, it isn't what I would want. I'm not gonna be too harsh on it since it's just a project someone made for fun and likely will only be using it on their portfolio when looking for animation/cinematography jobs, but obviously they broke quite a few basic things, like Ness being much older, and having characters like Mario portrayed as live action, yet Samus and Link as CGI, which doesn't make sense.
And this is a personal pet peeve of mine, but what is it with these live action Mario/Smash things always portraying Peach as some "sexy" blonde in her late 20's, with a tacky dress that makes her look like she is some risqué roleplayer as opposed to an actual spoiled, but innocent, young, and cute princess? Is it considered cool or edgy? Because I don't think it is. It's actually more than possible to make a really convincing Peach actress that matches well with how she actually is in the games, so there is no excuse, I think it was just poor direction.
As far as an official Smash movie, it'd have to be CGI. I honestly think if I had to get some kind of Smash visual media though, I think an anime or CG cartoon series would possibly lend itself better. Rather than having an emphasis on over arching plot, each episode could focus on a certain character on the roster, giving them a little story, with whether or not it's serious or lighthearted or a bit of both depending on the character in question (characters like Kirby, Peach, an Yoshi would get cute things, Fox, Samus, and Fire Emblem characters could be more serious in what's going on, Mario, Sonic, and Mega Man could be this in between, with episodes for characters like that basically being made for shonen anime enthusiasts, and characters like Olimar and Rosalina could have a story that's more quaint, sweet, and maybe a little sad).