God my headcanons for the Mario series are quite complex.
-Mario and Luigi are the official guardians of Baby Mario and Baby Luigi. So if Baby Mario blows up a building (ie Toadette's house), Mario and Luigi are responsible for it. Peach and Daisy are responsible for Baby Peach and Baby Daisy
-Toadette and Baby Mario are worst enemies to each other and they will fight each other a lot.
-Waluigi trips over Wiggler. A lot.
-Waluigi has an affinity with Barbie, My Little Pony, Polly Pocket, Bratz, perfume, make-up, and wearing dresses. He's an aromantic asexual.
-Peach is rarely there. Why? She gets kidnapped all the time. Most of it, Bowser had no part in it. It is currently unknown who loves kidnapping her.
-Toad and Toadette are dating each other and they are not siblings. On a related note, Blue Toad and Yellow Toad are close, wealthy friends but Toad jokingly calls them "the first same-gendered couple in Mushroom Kingdom".
-Unlike all other Toads, Toad is actually quite a cynical, grumpy grouch who smiles only when Toadette is around. He also calls anyone not named Toadette a Cabbage Patch Kid.
-Toadsworth is so boring he puts everyone to sleep
-Baby Daisy is obsessed with Baby Luigi and muffins. She boasts the largest Baby Luigi collection in the universe (including 1,634 unique self portraits of him) and she goes rabid whenever she sees a muffin.
-Baby Peach likes to explore and tell on people.
-Birdo loves Mario (Mario doesn't love her back) and she sounds like a man. She's obsessed with her red ribbon.
-Yoshi is super dumb and the Super Mario World Yoshi doesn't like him.
-No one in Mushroom Kingdom likes Wario (they're all actually extremely terrified of him as he is very unpredictable and nasty plus stupid), but Baby Luigi respects and plays with Baby Wario, something Baby Mario hates.
-The babies came from the past because they thought the present was fun (because Baby Luigi was kidnapped a lot, he doesn't remember his parents much) and besides "the people with the dead rats on their faces" are fun to be with. The adults traveled to the past and ever since the Shroob invasion, the babies would like to see the present. Sometimes the adults even question about their parents but Luigi insists that it's probably a different timeline so there's nothing to worry about. The paradox puzzles everyone anyway.
-Luigi is a constant worry-wart and he is like a stereotypical housewife and complains about how he does all the housework and chores while Mario "is just like another child". They live in a house based of Paper Mario, but bigger and baby stuff in it.
-Baby Luigi is very smart. He is able to speak with the adults (though most of the time their topics doesn't interest him as, like any typical baby, loves playtime and doesn't care about economics and politics) fine. He's still very naive and his curiosity sometimes hurts him. He doesn't speak much and he's very shy but when he's around his best friends, he'll express much of himself.
-Toadette loves Baby Luigi; she likes cuddling him and taking care of him.
-Wario is super cheap and greedy. When someone notices that Wario is creepily following him and that Wario wants to marry him, the person can just take a penny and roll it away, making Wario chase after it. He's super-dumb too.
-The Super Mario World Yoshi is referred to as "Skinny Yoshi" and she is actually a female.
-The colored Yoshis are in a band and they help the Mushroom Kingdom out in many ways, though Black Yoshi used to be the former ruler of the kingdom before Daisy took over.
-Sarasaland is a crime-ridden place. Daisy decided to move out of it and become ruler of Mushroom Kingdom instead.
-Mushroom Kingdom is the largest and most prosperous kingdom in the planet. Bowser is jealous and he resides in a separate coalition in a far-off land, calling it a real unimaginative name, "Bad Guy Land".
-DK and Diddy work for Bowser, but Diddy notices how dumb Bowser is and is pretty rebellious. DK is just dumb.
-Bowser Jr. was a former brat but he had reformed, also noticing how dumb his father is. His father doesn't realize this.
-Baby Mario and Baby Luigi own a friendly pet Chain Chomp named "Wan Wan". He's just as rowdy as Baby Mario and will often follow only Baby Mario's insane orders, much to Baby Luigi's annoyance. He likes biting Waluigi's legs and Mario butts.
-Kamek used to be a competent bad guy but he's gotten crazy as all his plans ever involve is kidnapping Baby Luigi. He also turns good guys into powerful dragons and bananas, much to the baddies' annoyances.
-Piranha Plant is female and she moves around by hopping in her pot. She's always hungry and she loves destroying Wiggler's garden. She works for Bowser.
I'll stop here because I've got even more to say and what I think happens is already long enough. I basically got this personal headcanon for literally every mainstream Mario character (though I do cover BeanBean Kingdom and the like at some point).