Sakurai had to think of a way to implement G&W products into a Smash game. Sakurai then came up with the ridiculous idea of making into a character, in which his moves came from a variety of G&W games. He then called it "Mr. Game and Watch.", although it's not an actual character from the G&W games. It's pretty similar to Mr. Hanafuda, but his moves come from a variety of Nintendo toys. For the most part it would look pretty weird for a floating deck of cards to attack players, so adding limbs to this character would make this character not look like floating Lunatones, it's a pretty crazy idea to as a LCD black and white figure. So probably, this guy would be called "Mr. Hanafuda", despite similarities with the names of Mr. Game and Watch.
Not quite. While Mr. Game & Watch was not an established character, his basic design (a pitch-black stick-like figure) appeared in many Game & Watch games,
as you can see when you follow this link. Of course, there's some differences between games, but look at Pikachu's sprites and you'll notice that's still happening. Hanafuda cards, on the other hand, have no set design. They have basic guidelines the sets follow (much like the Jack, Queen, King and Ace in a common card deck), but the design differs from set to set. Crafting a character that's obvious Hanafuda at first sight is near impossible for that reason.
Another thing is that Game & Watch was solely produced by Nintendo. Hanafuda cards aren't: there's still companies that make them to this day (including other big companies such as Disney). I think it's pretty awkward to include something that's not Nintendo's intellectual property (third party characters excluded, those are a different case) in a Nintendo All-Stars game.
Sure, Nintendo manufactured the things for a long time, but they also produced Twister, Mahjong, Chess and Checkers games at a certain point. Mr. Chess & Checkers make sense in Smash? We can go on about things they did in the distant past because it's nice to know where they came from, but at the end of the day, all of us only know (and love) Nintendo for their video games.
Also dude, you're setting yourself up for disappointment. You seem so assured your own creation is going to make Smash 4 - going as far as saying his name will "probably" be this. If Sakurai can make it work without it feeling out of place then all the power to him, but I can't see how a set of cards or a deck containing them will feel like a proper character.