The maximum amount of characters at the same time that actually seems to work with gameplay might be 7 (using multi-man brawl as an example). I'm not sure on the technical details regarding how it works/what the limitations are. However, there's an old video of all the characters in the Mario Bros. stage at once:
https://www.youtube.com/watch?v=XgBlOlOj3usI don't even know where one would go about starting to mess with this stuff.