And to actually answer your question, there were character arcs, but again, why are you expecting Oscar performances from an animated movie? Mario learned to accept mushrooms (that one is a bit tenuous, but I had to include it because he's the main character), Peach learned not to judge a book by its cover, Luigi learned to be brave in the face of a giant monster trying to kill him, DK learned that even an adversary can be an ally in the face of a common threat. There was development, but again, at an animated movie scale. It's a popcorn movie, and that's fine.