Lets see how good I am at guessing... That's Iggy, Morton, and Wendy Koopa, as the Koopa Kids in that pic, right?
Though that may be Ludwig Von Koopa that I think is Morton, but I think that one had white hair... So I'm going with my first guess!
And it's pretty cool seeing characters that aren't "directly" Mario game characters put in this, because they're characters from games of characters that are Mario game characters. (spinoffs would be an appropriate word, if not for the fact that really, they weren't really directly spinoffs outside of like Yoshi's Island and Wario Land )
Thank you. And ya, I know what you mean about Diddy and DK Jr. In fact, Diddy was originally going to be an "updated" version of DK Jr., but Nintendo thought the changes were too radical, so they told Rare to change his name so that he'd be a completely new character.
Another thing, though, is that Jr. did make an appearance in Mario Tennis for the N64, and that was post DKC. Other than that, though, ya, Diddy has pretty much taken his place. I'm holding out hope that he'll appear again in the future, though, because I really do like him, and think he's quite an iconic character in retro gaming history.