Its not just one factor that impacts a character's decision though
Relevancy - Bayonetta back in Smash 4, Inkling, Greninja
Sales / Popularity - Isabelle (Animal Crossing is huge), Awakening characters instead of Epharaim or Sigurd
How new they are - Lucas was supposed to replace Ness in Melee, Wario has pure WarioWare design, Corrin, Roy in Melee
General Icon Status - Megaman, Pac-Man, Snake, Ryu (Bayo is an icon, just not at their level)
Iconic to Nintendo - Villager, Duck Hunt, Marth
How they work - Sakurai used to give this as a reason as to why Villager, Ridley, etc. weren't in
Sakurai's Personal Tastes - He had always wanted Pit in Smash, and look at all the KI stuff in Sm4sh
Fan Demand - Ridley, K Rool
Hardware Issues - Why ICs were cut
Other Factors - Kojima asked Sakurai for a favor, Sakurai is apparently also decent friends with Kamiya
Cloneability - It takes less dev time, it certainly pads out the roster, I still wonder why Ganondorf instead of Black Shadow though
In no order
Don't forget Project Diva.
That's pretty big as well.
Valkyria Chronicles too and wens new Skies of Arcadia SEGA!?