Hot Coldman
Banned
I think the exciting thing here is the idea that you're not tied to preconceptions of what the roster of a Nintendo fighting game should be, because it's not Smash. So you don't have to have Marth, Mr Game and Watch, Mewtwo, Jigglypuff etc just because it's Smash.
The companies have similar levels of variety in their legacy of characters, too, so somewhat of a match-up of equivalents might be fun to see. (Not in playstyle, of course, just in terms of similarity in design/importance/genre.)
Along those lines, I'd probably go with (for a 40-man roster):
Final boss of Arcade Mode is Ra Moon.
The companies have similar levels of variety in their legacy of characters, too, so somewhat of a match-up of equivalents might be fun to see. (Not in playstyle, of course, just in terms of similarity in design/importance/genre.)
Along those lines, I'd probably go with (for a 40-man roster):
Nintendo :: Capcom
Mario :: Ryu
Bowser :: M. Bison
Peach :: Chun Li
Donkey Kong :: Mike Haggar
Link :: Dante
Zelda :: Nina
Kirby :: Mega Man
Samus :: Rad Spencer
Pikachu :: Palico
Fox McCloud :: Amaterasu
Captain Falcon :: Captain Commando
Captain Rainbow :: Viewtiful Joe
Takamaru :: Strider Hiryu
Ayumi Tachibana :: Phoenix Wright
Anna (Fire Emblem) :: Merchant (Resident Evil 4)
Ness :: Zack & Wiki
Ultimate Ghost :: Sissel
Inkling :: B.B. Hood
Shulk :: The Brave One
Doshin the Giant :: PTX-40a
Final boss of Arcade Mode is Ra Moon.