Nowhere does it say they used development resources to work on Chrom, just that he briefly thought about, but decided no.
I highly doubt Chrom wasn't work on at some point. I think "working on characters" at a beta stage is how they narrow down the roster to the final or near final roster.
In 64 Mewtwo, Peach, Bowser, King Dedede and possibly Wolf, Meowth, and Pit were worked on in beta stages. Also, according to a source I have (who leaked me things in Brawl, namely that the last unleaked stage was 75M), Lucas was originally going to be in, but was changed to Ness.
HAL Laboratories in Melee worked on Bubbles from Clu-Clu Land, Mach Rider, The Excite Biker, The Balloon Fighter, and The Urban Champion in beta builds of Melee looking for a good retro character, but they ultimately decided upon The Ice Climbers. Also, Ness' model was added somewhat late after the development team found out EarthBound 64 wouldn't be completed in time for the game's release.
There's also the Forbidden Seven situation, in which Mewtwo and Roy were planned for the final roster, but constraints pilled up (thanks SSE for shortening our roster a good 15 characters!) lead to cuts, specifically of those 2. Roy was cut due to a lack of interest, while Mewtwo was cut due to his build being glitchy and the team not being motivated to fix his hitbox issues and criticisms given that Sakurai demanded the SSE be the first and foremost focus.
From what I've heard from accurate sources, there were A LOT more characters tested in Melee and Brawl than these, and possibly even for Smash 64 as well.
I feel as if something similar happened to Chrom. I mean, Sakurai sounds CONVINCED Chrom is boring. To me, if you're really convinced of something, you probably tried to make it a reality.
I imagine Chrom was tested early and had some crafted early only to be shafted for "being boring" like Roy in Brawl. However, that is without the time restraints reasons. This may have led to Robin and Lucina both being in; it almost led to Lucina being added, as well as Marth's extreme changes.