Melee was dropped to E10 when that rating was finally introduced.

Brawl had Snake who was likely the source of the T rating and is much harder to remove than a random trophy. 

Having a E10 rating makes it much easier to advertise as with FCC regulations, children's TV channels cannot have Games rated T or higher advertised

http://www.esrb.org/ratings/synopsis.jsp?Certificate=6778&Title=Super%20Smash%20Bros.%20Melee&searchkeyword=Melee

Melee was dropped to E10 when that rating was finally introduced.

Brawl had Snake who was likely the source of the T rating and is much harder to remove than a random trophy. 

Having a E10 rating makes it much easier to advertise as with FCC regulations, children's TV channels cannot have Games rated T or higher advertised

How this game has an E rating is beyond me.
Same thing with games like OOT and MM. How do they have an E rating?

It's E10+. It's a rating created so that games like these don't get stuck with T ratings they don't deserve. OOT is on the opposite end of the spectrum, where its content wasn't nearly severe enough to merit a T rating.

It's like how the PG-13 rating was made to fill that gap that led to movies like Jaws being rated PG. Only in this case, E10+ is the 'PG' filling the gap between E (G) and T (PG-13).

Zelda is actually an excellent example, where Ocarina of Time and Wind Waker were rated E, even though you know there's stuff in those games that parents might find objectionable for young children, like a guy being stabbed in the forehead. Their remakes are both rated E10+, which wasn't introduced until 2005, well after their first release.

The original Gold OOT cart had blood. Gannondorf puked up blood....I think atleast the gold one deserves a T rating. and The Great Fairy kinda sexually explicit for a E game back then

The great fairy isn't explicit, she was a bunch of polygons covered with vine textures. The ESRB rating for OOT3D marks it as "suggestive themes" -- "Link encounters a few female characters that are depicted from low camera angles and dressed in outfits that display moderate amounts of cleavage." Even with improved character models, there's nothing sexually explicit about it.

As for the blood, I can only hazard a guess that the ESRB didn't see the very end of the game before making their rating. Then they found out about it (after release), and told Nintendo it would have to be changed for the game to keep its E rating. Just a guess. The odd thing is that even Ocarina 3D is marked down for "animated blood," while the GameCube and Wii ports of the original are only marked for "violence."