Alright, now that much of the essential selection is out of the way I'm going to toy around with some supplemental picks that contribute fresh dynamics to the roster as it stands. I'll try to justify each of these, although part of it is just because I think it'd be interesting to try.
King Boo might be a questionable choice to some, but I would like to point to the rousing success of Luigi's Mansion 3 and the bright future for this series. Even the recent Luigi's Mansion 2 remake wasted no time cracking a million copies (only four days). I'd probably want to keep Luigi pretty standardized to work alongside Mario rather than giving him a whole Poltergust deal, so King Boo will have to do some of the heavy lifting in representing Luigi's Mansion's unique horror-ish elements. As a ghost, I think he provides a lot of creative, tricky moveset potential that nobody else can provide - status altering effects, disappearance, one idea I quite like from another user is that he traps you in a painting for his grab.
Sidon breaks up the Triforce Trio with a popular supporting character from the newest couple entries in the series. He grants us a trident user and a water elemental, among other things. I've been more compelled by this idea recently in trying to "crack the code" on which Switch era Zelda character makes the most sense. I believe there are like five other equally viable options, but Sidon has been a fan favorite since his debut and I can very easily visualize a fun and dynamic moveset built around him. More modern standouts certainly couldn't hurt.
Tiki adds a bit of an oddball to the Fire Emblem lineup, someone who is not a "main" character but remains one of the most essential supporting characters in the series whos populaity has spurred on a return in FE Awakening as well as an eventual feature in both Warriors and Engage. As a manakete, she infuses the Fire Emblem lineup with a bit more flair to showcase its more imaginative magic elements. Plus, it'd just be cool to see her turn into a dragon for certain moves. She'd be plenty unique and feels best suited as a Fire Emblem character choice detached from the standard Lords.
Also hey
Pupp135
for the rounds where we need to make cuts, what are the rules about bringing characters back later?