They didn't go with Donkey Kong because it was too close to what it was parodying, King Kong. Nintendo may have won the lawsuit giving them the right to use DK but it wouldn't have been a good idea to use him as a mascot after that.
It's strange to me how the creator of this video glosses over Mario as if Nintendo knew that Super Mario Bros was going to be this colossal hit and purposefully designed him the way he was designed.
When Super Mario Bros released for the NES/Famicom in Japan in 1985, it wasn't done as this big flagship IP that was destined to become the face of the company. It was just another game that was carted around with the system. Then, in 86, it was bundled with the system in the states, which drove the game's popularity up even further. It wasn't really ever anticipated to be the system's most popular game, but it became that because everyone played it after their sales spiked and people started actually WANTING the NES in their homes.
Don't think that I'm bashing the game in any way. SMB is a solid game, and Nintendo was wise to choose THAT title to ship with the system. It's solely due to SMB that the NES was a hit to begin with, but when it was shipped out, the universe that we now know as the Mushroom Kingdom didn't really fully exist.
Nintendo was kind of in a rut with Mario. They had to create a character and flush out the universe he lived in, and it wasn't until Super Mario Bros 2 that we actually began seeing defining characteristics of the Mushroom Kingdom. And I can understand wanting to piggy-back off of SMB's success and not go all-in on Donkey Kong, considering DK was a parody of King Kong. That probably wouldn't have ended very well.
This wasn't a design choice. It was more like they created a character based on the vague pixels of a relatively unnamed IP that launched their system into popularity. True that the game shipped with the SMB stamp, but when it did ship, that didn't really mean anything. You were a guy that could shoot fireballs that stomped on turtles and weird mushroomy-shaped things, trying to save a princess from an evil turtly guy.
It really isn't all that weird because self-insert only matters in stories with significant story at stake, where you need to empathize with the main character's plight. Mario games, at least as they started, are just good games, they don't really have a story; not in the narrative sense. So it isn't at all weird that they went for a unique and iconic design that fit the media rather than run a bland self insert. Self insert for what? Going down pipes into dank sewer systems?
The whole video is based on the premise that Mario is poorly designed, except Mario is one of the most iconic symbols in the world right now. So maybe "conventional design wisdom" is just horseshit that artists and pseudo-intellectuals come up with to try and sell classes on.
He seems to fit the same niche as Sonic. Not the "aesthetically appealing part" but everything else, color palette and silhouette stands out from the environment he's in, simple design, simple clothing, we can recognize him from a distance.
This guy kinda talks like Tommy wiseau
I don't think that the video creator is correct that "self insert" wouldn't apply to Mario. The mythos developed for Mario is that he is a (relatively) ordinary person in extraordinary surroundings. Wouldn't it make sense that people would identify with Mario as the anchor to reality within the broader fantasy world?