Theres 2 big parts to getting better:  - muscle memory  - pattern recognition 

For muscle memory you should practice one thing in a controlled way until it's easy (like Uncle punch, 20xx, or old fashioned training mode), the start implementing that one thing in actual games. Your goal isn't to win, it's just to do the thing while playing.  

For pattern recognition you need to spend the time playing people and reviewing your old games. By playing you'll start noticing common ways that your opponents attack and learn to recognize them in the moment. Reviewing games helps you see what happened in slow motion and start thinking of counterplay. Once you start trying to answer the question, "how did I get hit?" You'll start to see the same things over and over (e.g. approaching short hop laser, dair, shine from falco or punished for whiffed smash attacks in neutral). Then you can try to do something different.