Your logic is flawed. Let me point out your mistake.
Yes, erasing characters will make more space. This is a given. But you seem to think that DVDs somehow already come fragmented with character slots. This is incredibly wrong. If it were, then all games would have a limited, already decided amount of characters, which would be constantly the same. This would've killed the fighting genre long ago.
Characters, like any data, take a certain amount of space. How much it is, I can't say. But I can say that if there aren't more characters is because of lack of time/effort, not space. Else Climax Heroes W would've been the final game of the series, since the Wii couldn't take any more characters in the disk. Any more data. Yet, the game has gotten more and more characters with OOO and now Fourze, the graphics have been prettied up, and it so continues. This is because there IS space. More compression techniques are invented, and so, data takes less space.
See the last Climax Heroes. It's 4.37 GB big. This one? I'm guessing about 4.50. Not a big difference, and there'd still be space for more. If it's even that big, mind you.