Not a big fan of this personally. I think limiting the stage list to just 5 starters from the get go is way too strict and will make game 1's in general a lot more boring since they're always gonna end up in Pokémon Stadium. 7 starters is totally doable with the stages we have and will promote a lot more variety. Besides, Yoshi's Island is definitely not starter material with hazards on.
Also, Arena Ferox has already been deconfirmed as a legal stage. It has random rotations each time you play on it from what people told me, so, rip. That, and I think banning stages like Lylat Cruise or Fountain of Dreams for bugs or frame drops found on hacked pre-release copies isn't something I can agree on, people have already found loads of glitches non-related to stages too. There will be a day 1 patch, and more patches down the line. Things will get fixed, and if they don't, then they can be banned.
Edit: and personally I'm not a fan of the seasonal rotation idea, I think it sounds a little too... arbitrary. The stage list I proposed has a lot of variety while still being manageable, I think it's fine.
I don't inherently mind 7 stages, but I don't think it's fair to say that Game 1s will always default to PS2 as basically every widely accepted Smash ruleset has had 5 or fewer starting stages. We'd also probably need a more complex banning process with 7 stages, and given that a simpler ruleset is probably better for a league where a lot of people probably won't be particularly familiar with competitive play, I'm a little iffy about embracing 7. Not totally opposed though.
Maybe FoD/Lylat won't actually be buggy post release, but until we know that they are, I really don't see why we should take the risk and include them. There's plenty of legal stages that can take their place, and there's no reason why we have to chance having a buggy stage screw up a game when we're assured a fine match with something else (say Hazardless Frigate Orpheon or something).