I don't know. I feel that the "mights" have something to do with this. In the end, it says that "this character might be a character" but the first statement in the hints say that "this character is a character."
Both paragraphs go by the same pattern of mights, absolutes, and absolutely nots, so the mights might have something to do with this since he disproved the last set of mights with the beginning statement, possibly showing that as the key to this whole riddle. Since the character can't be a magikarp, the last might in the first paragraph is false while the last might in the second paragraph is true. The first set of mights say "the character might have hair" and "the character might have a red costume" My theory is that one of these mights is true and one of these mights is false just as the last set of mights were. If the character has a red costume, it doesn't have hair, and if it doesn't have a red costume, it has hair. Since team battles have a red team, they all have red costumes so based on my theory (remember, a theory), the character doesn't have hair. That's all on my part for now. Just some food for thought. ^_^
My theory:
The key is that the character is a character so the last might in the second paragraph is true since the key states that it is. The last might in the first paragraph is false since there is no character that is magikarp. My theory is that mights that come in a set are made so that one is true the other is false. For example:
The pattern is:
The beginning statement that "This character is a character" is the key
Paragraph one is set one
Not, might (set one), absolute not,
absolute, not, absolute, not
absolute, not, might (set two)
Paragraph two is set two
Not, might (set one), absolute not,
absolute, not, absolute, not
absolute, not, might (set two)
The absolutes and nots point out the obvious except the "is not too big" which leaves the mights under consideration.
Based on my theory:
Not, might, absolute not,
absolute, not, absolute, not
absolute, not, the last might in set one(was false by common knowledge)
Not, might, absolute not,
absolute, not, absolute, not
absolute, not, the last might in set two(was proven true by the key)
So if this means that if one of the mights in a set is true, the other has to be false. Using this, we know that there have to be red costumes for every character since there are team battles that have that color required.
If this is the case:
Not, first might in set one (proven true because it's required in teams), absolute not,
absolute, not, absolute, not
absolute, not, the second might in set two(was false by common knowledge)
Not, first might in set two (theory says this is false since it the other might in set one is true), absolute not,
absolute, not, absolute, not
absolute, not, might in set two(was proven true by the key)
The remaining characters in this are • Fox • Jigglypuff • Ness
• Lucas • Pokémon Trainer (Charizard • Ivysaur • Squirtle) • Wario
If Jigglypuff's tuff of hair counts as hair, then my theory would suggest that it is one of the pokemon with pokemon trainer. Since one of the "nots" says this character is not too big, and ivysaur doesn't really have any hands, I would guess squirtle if those count as his hands.
Ok, I'm done fully editing this. It's safe to read this now without having the text change every time you refresh.