A portion of a Nintendo Dream interview with Masahiro Sakurai, as translated by Source Gaming...
ND: Why were Dream Land, Peach’s Castle, and Hyrule Castle chosen to return from the Nintendo 64 version?
Sakurai: There were a lot of reasons, but it was something like a process of elimination. For example, Kongo Jungle was already in the game, and Sector Z was basically already in the game as Corneria (although I know that the size of the two stages are totally different). Smash 64 only has nine stages in the first place, so in the end we chose the stages that we thought were appropriate out of those nine.
ND: I felt very nostalgic when I saw the tornado in Hyrule Castle. Also, when I saw Hyrule Castle in HD, it was a lot simpler than I remembered (laughs).
Sakurai: Ahh, I remember thinking “I made that a long time ago!” (laughs) The original textures would look blurry in HD, so we remade them. When bringing those three stages back, we focused on making sure the stages felt nostalgic and familiar, but also updated the visuals to look much sharper.