Aren’t Hero and Banjo proof that they’re doing what series are huge and popular or what characters people really want in Smash?
I feel like it's d) all of the above. The issue is when it comes to saying there is a particular reason all DLC characters are chosen, rather than each one is chosen for a different reason. Some are chosen because they're highly demanded by Smash fans, some are chosen because of their legacy and overall popularity, and others can be chosen because of how well the franchises have sold and if there's upcoming installments to promote--I think it's fair to say that those who are a combination of some or all of these factors are more likely than others.
But we can't reasonably dismiss a character because it doesn't check a box--Joker can't be in because he's not on Nintendo, Hero can't be in because Dragon Quest's not popular in the West, Banjo & Kazooie can't be in because their franchise is dead. In the case of Digimon, the success of the franchise as well as how well that franchise fits Smash makes it a good possibility, even if I think it's unlikely we'll see a Bandai Namco character. But I try to balance that with my bias because, out of all the Bandai Namco characters, a Digimon character is the only one I personally care about.