I don't see why pre evolutions can't be in the game as well.

If true, Emboar will suck in this game. He'll be slow as fuck, same with conkeldurr, how will he fight carrying those 2 pillars?

A number of them aren't even fighting types - Poliwag, Poliwhirl, Torchic, Shroomish, Ralts, Kirlia, Chimchar, Tepig, Chespin and Quilladin. In the games all Pokemon aren't created equal - I know this game would not be canon - but having a Tyrogue take out a Blaziken would be silly.

I don't think it would be silly at all. The ninja storm series has young characters like kid Naruto and Obito taking out guys like Madara and Hashirama. The same dynamic can happen here.

And with the fighting types, they can take liberties. While Pokemon like Poliwag, Shroomish, and Torchic wouldn't fit, I don't see why Poliwhirl, Kirlia, and Quilladin can't. Same with other guys like Snorlax, Alakazam, and Electivire.

What I want to know is how they'd handle types. They obviously can't do 2x damage, but it'd be tough to justify ignoring typing altogether.

It is slight speculation but if I recall correctly, he said he was working 1. on 2 titles for 2014 and 2. Neither were Tekken related. It's pretty likely they got Bandai Namco to work on it since Nintendo owns part of the company. 
In addition, it's far more likely that the creator of the Naruto games, CyberConnect2, who are busy with Naruto Shippuden: Ultimate Ninja Storm Revolution due this fall, and the the iOS title, Little Tail Story. 

Everyone assumes that the roster will be all fighting types, but why does it have to be? Because it's a "fighting" game? That's a genre, not a Pokemon type! I think so long as the Pokemon are mostly physical move users instead of special move users, it could work. And if it's like Naruto, then the Pokemon not being equal makes sense. Yeah, as spemanig said, young Naruto can fight Madara, but he won't likely win. If you've actually played the games, you know how unbalanced all the characters are. Young Naruto would get his ass handed to him by Madara, but Sage Mode Naruto could handle him. In a similar vein, I could imagine having Tyrogue and Mega Blaziken in the game, and the only way Blaziken would ever lose is if Blaziken was being played by a noob and Tyrogue by a national level competitive tournament winner.

Somewhat like Tekken I presume?

I think more like the Naruto games. As long as I can use Toxicroak, I'm down for either. I'd rather a blend of the two.

Not sure about Naruto. I think it's most likely going to be like Tekken, which is definitely a good thing since  Tekken is a good franchise!

The only reason I think it'll be like Naruto is because the video looks absolutely nothing like Tekken gameplay wise but closely resembles the Naruto games. Also, as it's Pokemon, I'd expect them to want a fighting game to be more kid friendly when it comes to difficult, and less complex like Tekken is.

That being said, I love real technical fighters (never played a Tekken game though) and would love a Pokemon game that really is based around the machanics of Tekken.