Not gonna lie; I genuinely thought Wonderful 101 was a third-party game too. And that's from somebody who completed and loved it.
But really; it's an easy mistake to make; it was developed by Platinum Games, a third-party studio. Sure, third-party studios have worked on Nintendo franchises before (such as Sega with F-Zero GX and Capcom with Legend of Zelda: Oracle of Ages/Seasons, and Minish Cap), but I believe this is the first time a third-party has actively created an IP specifically for Nintendo.
Now I know that Wonderful 101 is a Nintendo property, I don't think Wonder Red would work as a playable character. The obvious comparison to draw is Olimar, but there are key differences. The whole point of the Wonderful 100 is that they merge to form gigantic weapons. That obviously wouldn't translate to Smash Bros. (except as a Final Smash, but still; what do you do for the base moveset?). That problem could be addressed in one of two ways, both of which have their own problems:
1) Wonder-Red fights solo, except when using a Final Smash. Obviously, this would be pretty lame. It's established even within Wonderful 101 that he's relatively weak on his own, and has no real moveset potential at all.
2) All of the Wonderful 100 are playable simultaneously, and would basically be bunched together. This would just look weird, as it would be impossible to distinguish between them in a fight, and they'd look like a big colourful mess. Plus, the Wonderful 101 are "regular" people; they're not supposed to be tiny (I know the opposite is true for Olimar, but it doesn't feel as forced with him, as Pikmin games don't have him running around cities and encountering other people).
I'd be perfectly happy with a Wonderful 101 stage, which I think is certainly feasible, and could be awesome as hell. Imagine fighting on one of the bosses as it rampages through cities/oceans/volcanoes/etc. You could even have the Wonderful 101 in the background, doing all kinds of epic shit. I think that would do them far more justice.