To be fair, they're ignoring Sheik's Goddess Harp, and that's the most iconic thing she uses. Would Hilda's staff really be missed if she were Zelda's echo?
The Harp is a small used item and isn't how Sheik actually fought enemies. She never fought until the Manga. Thus, they can't really do much with it. It'd be a taunt at most. Hilda uses her staff as an outright weapon. Entirely different situations. It's like Link's Sword in terms of how core it is.
Still don't think Hilda would be a good choice for a clone or echo though. Those need to be selected with the same amount of care as full characters in this day and age.
...Like Daisy, you mean? An easy Echo as is? Cause that's really the equivalent we're talking here. A quick one off but notable character. Actually, Hilda is way more important than Daisy but still.
Toad doesn't really do much on his own if we're counting either the singular retainer to Peach or the race as a whole. It isn't like Piranha Plant where it can draw from all these different Piranha Plant species.
But is still a missing core character. Captain Toad is a new character who is getting notable, but is unrelated to the main Toad and has his own merits to be in. He has a massive identity as an important ally of Mario anyway. And Toad does a lot. The issue is the lack of unique moves, if that's what you mean. But that's not hard to find. He can represent the spin-offs like Mario Kart perfectly if they needed an idea. We have no one representing power-ups(of which he and the race uses). It's not an issue.
Now if we're talking actual main series character Captain Toad, a specific character who is both a main series character and has his own spin-off, then HE has enough of an identity to work.
Toad's a specific character, so this already has no merit as an argument. What you're forgetting is that Toad is just the name of the Species in the US. He has a very specific individual name in the Japanese region. Which means they're outright ignoring a specific incividual.
Captain Toad isn't anywhere near as important and only rising up as a star. He's notable on his own right, but isn't even on Rosalina's level yet of notability. He's awesome, don't get me wrong, but not comparable to Toad's iconicness. They're different characters with different skillsets. And both are just individual members of the Toad species.
I'd say Waluigi and Toad are pretty fairly treated considering their positions within the Mario franchise. Only Captain Toad is being shafted.
Captain Toad got a new background role not long after he had his own game. And a Spirit. That's not being shafted. That's being fair.
Otherwise he'd be an AT if you want to give him more. But he wasn't shafted in any way. He represents exactly a core portion of his first Super Mario appearance, a character with a vehicle. He's actually pretty accurate. Could he be more? Sure. But he's not at this time and that's okay.
FYI, the main Toad is an active member and isn't there just to protect Peach. He, like the Yellow and Blue Toads, are outright adventurers. That's the job of her regular bodyguards. Smash doesn't specify the differences due to a language barrier as is. Also, they just retired Kunopio-Kun, who is more or less a counterpart to the Main Toad. Not the same guy, but a similar idea. Also, the main Toad could not promote into Captain Toad anyway unless the development team screwed up. You'd have to check the Japanese spirits. It's the species or the specific member. Tons of people do not know that Captain Toad is officially a different person from the main Toad and it's an understandable mistake.
Waluigi is absolutely missing as playable and is a huge iconic character(or at best as you can get when you're below the biggest ones like Mario, Pac-Man, Sonic, and Steve/Alex. The four biggest icons in gaming). Like he's Level A. He is not "treated fairly". He's actually pretty bad considering he's more than just a guy with a tennis racket. He only now slightly does it better by being beaten, as he's a butt-monkey too. Yes, they actually upped his role considerably by representing him better. Even if it's more of a coincidence.
I get where you're coming from with the Mario spin-offs getting tons of content in Smash, but again, there's a certain prestige attached to having a playable representative. I don't think the Smash team as a whole considers the Mario spin-offs prestigious enough to warrant having a spin-off exclusive character. Maybe it could've happened in 64 and Melee, but that ship has sailed.
There's no "prestige". It's a matter of figuring out a good moveset. Sakurai chooses races over individuals very often(many of the Pokemon are just species and not a particular version. Only Pikachu, Mewtwo, Lucario, and if you stretch it, Charizard, are based upon a particular version. Jigglypuff is kind of awkward only cause it was a clone, but you could loosely count it too. That's what, half of them being species? Hero is generically done, not focused just on one version, but is clearly the class). Your prestige argument makes no sense. Class characters are in(Pokemon Trainer, Villager, Miis). They are not individuals, therefore, it means they didn't care that much about that. Plus, PP is not a hero, but nor is Waluigi. The only thing PP had was more clear moves to work with(or you know, it just went better in Sakurai's head. Maybe he has a bias against Waluigi even. These happen. He's only human).
You're way overrating the Smash character selection process. Waluigi, like PP, has a thing they and only they can do. That's what matters. They're equal in that regard. One couldn't use a clear base, and PP was created under a circumstance it had to be a non-hero(does Waluigi really count as that? He's been a villain once, sure. The fact he can be a protagonist in Mario Party's story mode might mean he's effectively close enough to a hero or is grouped with them that Sakurai doesn't really see him as a clear antagonist anyway).
On a tangent, I think making Yoshi his own franchise was a mistake since the Yoshi's Island series is more heavily tied to Mario than Wario or Donkey Kong, so I wouldn't want to see Luigi's Mansion get the same treatment.
Luigi's Mansion as a point was if they added a character straight from it. They should be under that because it has no real ties to regular Mario. Yoshi is a Mario Spin-Off, but actually still is very similar. LM? Not even close. It's not even a platformer.
Yoshi made sense due to being based upon his Yoshi's Story design. If it wasn't for that, he'd have the Mushroom symbol. Of Luigi was added first in Melee, while Luigi's Mansion was in development, he very well could've been representing that. It's all about the timing. That's why Wario represents WarioWare, not Land. Because that was the active series, and also fit his characterization in Japan better.
My point is that the Fire Emblem section of the roster is padded with Marth and three characters directly (through Lucina) or semi-directly (through Roy and Chrom) based on his template.
So Young Link, Ganondorf, and Toon Link, who are special circumstances and are not equivalents to Robin, Ike, Corrin, or Byleth, who did get added too. You can't have it both ways here. Yes, we'd be getting unique one-offs and clones. Or it doesn't compare to Fire Emblem at all. It's both or nothing. It's nothing, cause it doesn't actually work like FE whatsoever.
If Zelda were to imitate Fire Emblem in Smash, I guess that we would get a fourth Link considering the other two Links (which to be fair I do want since I miss the old moveset too much).
Nah. We'd have a unique character because that's actually what Fire Emblem does for the first character and then a clone possibly too. Brawl added only a unique character and no clones, which also proves FE isn't just "clones all the time" like you're implying.
In other words, your premise is flawed since you're not looking at the full picture.