Not bad
I think that for a sprite movie it was pretty well done.
What i liked is how it was set up like a 'movie production', and i think the key to making it funny, at least in my view, is to expand on the 'production errors'. Say, Sonic accidently takes out tails instead of the enemy, or (like your idea with kirby n mario) have
the guest stars mess up the battles :). Basically-- have some jokes on 'accidents' in the scenes, rather than humor from farts( as it seems like people weren't too happy with that part)
All in all, I think you did a good job from what I've seen, sound, animation, etc. , as it all blended together well. Keep on workin! :P