I agree with you on most of these points, but a couple.
The "legacy" of SMRPG comes from the gameplay. Timed attacks, Bowser and Peach in more invested roles, sometimes even being playable, more whimsical and comedic plot points, using weaponry and equipment from the Mushroom Kingdom, etc. have all become staples of Mario RPG games going forward since then. SMRPG laid the foundation for future Mario games to come, but Geno isn't a part of that. The two are closely related, but Geno isn't necessarily the crutch behind SMRPG's legacy.
Nintendo has crossed over with Square Enix more than once.
Mario Hoops 3 on 3 had Final Fantasy characters, and
Fortune Street contained Mario and Dragon Quest characters on both DS and Wii, so it's more common then you'd think.
While Geno does make sense to Sakurai,
something is still keeping him out, so there's clearly a disconnect somewhere. Also, multiple other Mii-related fighters received splash screens, such as Abraham Lincoln, Ice T, and members of Japanese idol group AKB48. While Geno was the only costume to receive one, he might not be as special as people make him out to be.
You also should realize that Geno has the most amount of support on this website. At times this thread reads like Geno fans defending Geno to their dying breath against the skeptics and the nonbelievers, and a majority of the people who post here frequently are from the Geno thread, as evidenced by the fair amount of Geno avatars and overall support. Because of this, it's only natural he'd have more votes because there are more people here who support him.
Geno's popularity isn't as big as you make it out to be, nor is it as small as SuperSceptile makes it out to be. At the end of the day Geno is a popular fan pick, sure, but he sits among many other popular fan picks in a veritable no mans land of being popular, but not necessarily having the popularity required to make the jump to playable.