This one is a bit better, however....
I like the new feature in this one. The prolouge and the select ending. The battles you left out some of the real origional scenes of the origional like Sonic flickin da'bird, Sonic falling into the steep rock and getting saved, Mario on the gokart, and both knocking each other out temporarely. The caped Mario siesmic tossing Sonic was a nice touch though. Their should have been more of mario fighting the Luigi clones and the mushroom retainers should at least have some weapons like guns,swords,lazers,or fireflowers. Maybe you can add that in your next revamp of this one. You should also add a 3rd ending when Mario wins completely and survives and saves the princess all in one piece. Nice flash.