Oh, look, more responses to my questions.
@KingOfAwesome69:
Why are the newcomers still being worked on when, in the past, the roster has been the first thing finalized about the game and newcomers were completed before now?
The roster has been finalized in terms of "These are the only characters who are being considered for Smash 4". We're hoping to get all of the characters done soon. Beyond the three newcomers and Roy, all we have left to work on are Wario and Wolf, so we're farther along than I might have made it seem.
I wasn't on the development team for Brawl, so I'm afraid I can't provide much context. But from what I heard from my colleagues, the Brawl roster was done so quickly to work on the Adventure mode. But they still hadn't finished Wolf, Jigglypuff or Toon Link at the time, and obviously Sonic wasn't included.
Sakurai has been prioritizing veterans over newcomers, as he doesn't want any fans to be disappointed with any cuts. He only worked on Villager, Mega Man and Wii Fit Trainer to show off some of the new cast at E3, but they weren't done until all of the first twelve characters were done. Does this make sense and answer your question? If not, ask where you'd like specifications.
What decision process went into choosing those three newcomers, plus Mewtwo/Roy?
Mewtwo and Roy were chosen due to an overwhelming amount of support here in Japan for their return, plus they are really popular in other areas of the world as well. He wanted to bring back Doctor Mario, but once we pitched ideas to him about how to develop Bowser Jr. (I work in concept by the way. We're the guys who make the ideas and pitch them to Sakurai), he didn't want to over saturate the Mario characters. We haven't discussed the prospect of DLC characters yet, but if we did, I'd imagine Doctor Mario, and Pichu, would be one, as they each have their fans who want them back in Smash, though they are smaller than Mewtwo and Roy.
As for the other three newcomers, we did bring a lot of ideas to Sakurai, such as Ridley, Little Mac, Takamaru, Chrom (which was surprisingly turned down quickly), Andy, Shulk, Lip, Black Shadow and Starfy. He liked the idea of Bowser Jr. as the painting was something really unique that made him stick out. It wasn't much of a popularity decision, but the kid does have a respectable fanbase in Japan, Europe and the Americas.
King K. Rool was chosen mostly due to popularity reasons. His name was among the most common in all of the places we visited, according to the scouts. He also felt that K. Rool was s sharp contrast to the other characters, and can be partially explained as the reason Bowser was changed.
Palutena was chosen because she's another popular character. I think a lot of the time, people think that we don't listen to our fans, but we really do. Her inclusion also helps bring Sakurai's revival of Kid Icarus to a close. He did want to include her in Brawl, but was unsure of what direction to take with her. Uprising fleshed her out and she was among the first choices Sakurai made (alongside Villager).
Why is there no retro character when Sakurai mentioned wanting to bring one back in an interview?
I honestly have no idea. We did bring up several ideas, such as Bubbles, Mach Rider, Little Mac, Takamaru and Balloon Fighter. We even brought up DK Junior! We've learned not to question Sakurai, as the long work days and his arm are making him growingly irritable. He really likes his older characters, so I'm as surprised as you are about not including one. Maybe he is including one without consulting us on it, which wouldn't be the first time. Or maybe he wants to make a new Ice Climber game.