Looks like it cannot find a stage based on that error message. Did you try adding a select.def that also contains stages? Or is a stage file referenced somewhere inside the character? Not something I've seen before, but I also could not rule it out.
Do you have a link to the character, on mugenarchive or somewhere? If I'm able to reproduce the crash, it should be easy to figure out what's going wrong. In the meanwhile I'll doublecheck how Mugen behaves when it cannot find a stage, I think Dolmexica just showing that error screen is a bit imperfect, that's something that can be improved in the next version either way.
Regarding how many characters are supported, there is no fixed upper limit. The only time the character count comes into play is when loading the character select screen, and it would probably be pretty hard to max out the Vita memory with just the portrait images. Loading might take a while though, I assume the point where loading is just too annoying is reached earlier than any memory concerns. The highest character count I have tried is roughly 100 characters, but there I got around that loading annoyance by just not including the portrait images on the select screen. But yeah, long story short, not really a limit that should cause crashes there.
If it crashes it might again be some file it can't find, or a problem with file names it can't parse, that's what often causes issues there. If you know what characters or stages cause issue, I'd be interested in checking them out just to see what might be causing crashes there.
Thanks a lot for letting me know about these issues!