Difference between Captain Toad and other characters is that while other characters don't jump, Captain Toad physically can't jump.
The idea I've had for Captain Toad for a long while was giving him no jumps, but his up special is some sort of complex mine cart system that makes up for it.
Canonically, Captain Toad cannot jump because his backpack is too heavy, right?
I'd rather see them work
with that, rather than coming up with ways to work around it.
DOWN B - Turnip Pluck
Similarly to Peach, Captain Toad plucks a turnip out of the ground - but rather than being able to toss it, he puts it in his backpack. If Captain Toad has a turnip in his backpack, he cannot jump, but his weight, knockback resistance and the power of his attacks in which he swings his backpack (say, smash attacks) are increased. Using Down B again lets Captain Toad take out the turnip, allowing him to jump again.
Or make it even more gimmicky, by having him put stuff in his backpack over time, increasing his weight, knockback resistance and power of his bag-swinging attacks, while decreasing his jumping height. His Down B could become 'Empty Backpack', making his toss out all found items and removing the weight from the backpack.
I don't really see how Isabelle would work out. I'd probably look more towards Mr. Resetti, simply because of that pickaxe of his, and you don't want to mess with an angry mole wielding a pickaxe.
Just a mole with a pickaxe is too limited for a unique moveset, I'd say - even if he's quite the remarkable character. I'd argue that the entirety of Animal Crossing has the same issue Sakurai accused Villager during Brawl's development: they're just not fighters. Villager ultimately worked due to the vast majority of tools (though even he had to borrow from a different series), but Isabelle, Mr. Resetti and the rest don't have access to those.
As for the 'Rosalina was a popular character before her inclusion' debate: in
the roster prediction thread she only rarely shows up.