Those are both excellent points, and ones that never occurred to me but that now seem obvious. I'm now very curious to learn more about the second point. It seems like Little Richard in particular would have been chosen by one of them.
You could name any number of people who aren't on there and who could be. Elvis, Buddy Holly or Carl Perkins for example.
At the time of Pepper I don't think the Beatles were particularly interested in underlining their rock and roll roots. It was a time of expanding horizons. Philosophers, swamis, writers and visual artists were put more to the fore.
There were a few throwbacks to their youth and the quirky inclusion of Dion (presumably more a joke than anything else).
Incidentally, quite a few of the artists were chosen by Peter Blake, the sleeve designer, and not by the Beatles themselves.