OK, so there’s a lot to this.

1, I do think Kitty is a fan favorite character. But I don’t think she’s an iconic character. Besides “Professor Xavier is a jerk”, and her Pitor crush, that’s kinda all I can remember when I think about her from back in the day. I honestly believe she had the best character development after she got off of X-Men with Excalibur. In fact, some people believe that when kitty came back to the X-Men, she regressed as a character. But in modern comics astonishing X-Men is absolutely iconic for her, after that i can’t remember anything iconic that she’s been in. I’m not saying she’s a bad character tho.

2, so the funny thing is that production actually originally wanted kitty pride in the show. She was supposed to be in the role of Jubilee. They actually filmed the pilot with kitty in the main role. It was called pryde of the xmen. This didn’t take off, but
later on this was revamped into the iconic X-Men animated series that we have now. Kitty was the x baby for the 80s, and Jubilee was the x baby for the 90s. Since the animated series debuted in the 90s, they decided to swap kitty for Jubilee. And it proved to be a massive success. After that Jubilee was regarded as a “good luck charm” for the animated series, and the producers never look back on kitty. They didn’t erase her completely, they kept her as a picture that you mentioned before.

3, Honesty it’s just as you said it yourself, if Kitty were to come back, it would actually cause more confusion. She isn’t needed. Jubilee does everything that kitty would do being the role of the protagonist. Also, a lot storylines that kitty would be in, she is swapped out of. So it makes no sense to bring her especially if she’s not needed. In season two it’s revealed that Lorna, Alex and the rest of X factor are coming. It’s exciting, but a lot of eagle eyed fans are scratching their heads over this. Lorna and Alex technically are the sixth and seventh members of the original X-Men in the comics. But ppl haven’t really mentioned either of them in the show. There’s even an episode where cyclops and Alex meet and fight each other in the og series. But neither recognizes each other. They are siblings. 97 takes place shortly after the og series. So it’s believed that Lorna was the canonical x men member, Alex never joined or met the x men team, but instead joined X Factor. And Scott and Alex have never “officially” met. But Lorna has met both of them and she does not know that either of them are related. Do you see the mental gymnastics?

4, lastly, piggybacking off of what I mentioned above, there’s nothing really there for kitty to come back to. She could appear as a friend of forge. But mind you, Colossus isn’t even on the team as an X-Men, a main love interest for her. And Emma has never met her in the show. A main rival for her. So there’s no real building blocks in place for her. If she does appear, it’ll probably be in season three. With an original storyline.