i know why it isnt for the story mode categories, but would it work well for challenge mode?

It would definitely work well for Challenge mode! Although there may be some set ups involving rapid throwing that you may struggle with (Raging long legs springs to mind!)

I'd recommend following Gorei on twitter and seeing their antics as they use NPC: https://twitter.com/Gorei_50

npc played on WiiU should be faster, in fact, because of fast loads.