Amaterasu or Chibiterasu would be awesome. Actually, there are a lot of Capcom characters that could fit. Viewtiful Joe, Megaman...
Banjo-Kazooie, seems fitting for a Smash game.
A character from Crystal Chronicles, the Nintendo-only Final Fantasy series.
More Mother/Earthbound characters.

Also, there should be a Phoenix Wright-related assist trophy. Phoenix could pop out and shout OBJECTION and the giant shout-bubble could send people flying if they touch it.

And there should also be better alternate costumes. Perhaps ones that change the character's design. Think Tekken Tag, some characters changed into other characters with similar movesets (Roger the kangaroo became Alex the Dinosaur, Panda became Kuma, etc. the characters have the same moveset but look completely different and have different voices/sounds. They could use this in Smash Bros to bring some characters back like Pichu or Doctor Mario, but as alt costumes so not as much space is taken).