I am simultaneously proud and saddened that I receognise all but 4 or 5 of these characters.

^^ Tags or GTFO. ;)

The red-guy with a hammer is not Light. It's a dwarf from Don Doko Don.
http://www.taitolegends2.com/images/flyers/don_doko_don_01.jpg

Beside that, this picture is legendary.

bomber man throwing a metool while theres three others throwing bombs. lol

There, have some notes/tags. Also, in case it comes up, the blue armored fellow on the bottom and the metal dragon under Morton Koopa are from the PCE version of Wonderboy 3 (Dragon's Curse).

...and only one will survive, I wonder who it will be...

The Darius tag is WRONG.

Thats Alloy Lantern, not King Fossil

Snap. So it is. Tags changed accordingly.

It's so hard to keep track of all those mechanical fish bosses...

This makes me so happy.

I've added notes on a few left over characters:
Papi, Pupe, Poh from Aztec Adventure (sega). I can't identify who it is leading them but it sure isn't Nino from the same game.

Psycho Fox from the sega game of the same name

I was going to tag the spirt ghost that Pitt is shooting with an arrow, but I don't know the specific name of the enemy but it does come from the Kiki KaiKai/Pocky & Rocy series.

Isn't the bomb guy above Sir Arthur from one of the Parodius games?

Is that Princess Tomato from Princess Tomato and the Salad Kingdom? Never played it...

Extra tags added. And that version of Bubby is from Parasol Stars, not Rainbow Islands.

and mario ...

Ferlanga said:
The Darius tag is WRONG.

Thats Alloy Lantern, not King Fossil

The Darknut tag is also wrong.
That's actually an Iron Giant from Final Fantasy II.

The ghost Pit did hit his arrow on is from Pocky & Rocky/Kíki Kaikai.

That is indeed Princess Tomato. Another thing I never expected to see on Danbooru.