Pauline (Super Mario? Donkey Kong? I could see an argument for either)
Before Peach, there was Pauline. Pauline debuted in 1981's Donkey Kong, which also featured the first appearances of two little characters named Mario and, well, Donkey Kong (or technically Cranky Kong). She originated as a damsel in distress for Mario to save, but went on to be so much more. As I said above, I could see her being a part of either the Mario or Donkey Kong series, due to her close connection with both.
After a long absence, she finally reappeared in the Mario vs. Donkey Kong series, where she goes from being kidnapped by Donkey Kong once again to, eventually, teaming up with him. Her next appearance is in Super Mario Odyssey, where she is now the mayor of New Donk City. Her popularity exploded after this, allowing her to appear in the Mario Tennis, Golf, Kart, and Strikers series (alongside Donkey Kong, of course).
Pauline is one of Nintendo's first iconic characters, even if most people didn't know her name back then. With her retro roots and relatively recent resurgence (I swear, that alliteration was completely accidental), this festival at this time feels like the perfect opportunity to add her to Smash.