Hold Start and press Up+B, Right+C, Left+A, Down+D on the team screen within the 15 seconds given by the counter. Both the hidden characters will appear on either side of the time which will also reset to 15.
Each character has three extra poses that can be used with a press of either A, B, or C. Press any button after the winning hit but before the standard pose begins to use one of the three extra poses.
This requires two controllers. On the highscore screen press A and D on the first player controller then B and C on the second player controller to toggle the Blood setting.