"What keeps him from making more top 8 appearances?"

From the ssbwiki

Luigi currently ranks 13th on the tier list, in the A tier, placing him in the dead centre immediately above his older brother Mario. Luigi is notable for having some of the best aerials in all of Melee; they are very fast, very powerful and have very low ending and landing lag. Luigi's wavedash is the longest in the game, taking him nearly half the distance of Final Destination at a high speed (only slightly slower than Captain Falcon's dash). Luigi also has a wide array of efficient combo and KO moves both in the air and on the ground. Luigi's traction is the lowest in the game; while it gives him an excellent wavedash, it also limits some of his approaches on the ground if he's not wavedashing, as well as his out of shield options (as he often gets pushed too far away for fast follow-ups when his shield is hit). His approach options are generally poor; he struggles to approach on the ground despite his excellent movement due to his short range and lack of disjointed hitboxes, while his aerial approaches are hampered by his high short hop and slow falling speed (giving him one of the worst SHFFLs in the game) and his extremely poor aerial mobility. This problem is compounded with his difficulty in forcing opponents to approach (mainly as a result of his very poor projectile). Additionally, his recovery is easy to edgeguard, being very linear and slow despite covering a large distance.

tl;dr Luigi has good aerials but sucks in the air. He's got a combo breaker nair that gives a lot of players trouble before they learn the MU. He has great wavedash mobility and good ground moves but has linear approach options at the highest level (M2K says he beats luigis because they commit too much with wavedashing all the time).He's a floaty and not very heavy so he dies off the top easily and his recovery is pretty bad outside of super intense Down B mashing and misfires.

Is it lack of people who main him, or is he just not that good? I'd like to pick him up as a main.

Luigi has plenty of top level representation including Abate, Blea Gelo, Eddy Mexico, Vist, Vudujin, and many others. There's a list of luigi mains on his ssbwiki but that certainly isn't all of them!

http://www.ssbwiki.com/Luigi_(SSBM)#Active

As stated above, Luigi has many strengths but also glaring and exploitable weaknesses so winning with him is tougher than winning with the S tier characters.

So I guess my last question is what are his worst match ups and who would be the best secondary to cover said bad match ups.

Luigi's bad matchups are the top 8 (Fox Falco Sheik Marth Puff ICs Peach Falcon) which range from miserable (Marth, Fox, Falco) to doable (Falcon). The best secondary would probably be Fox since he has no bad matchups, but any of the top 5 would work.

I think a lot of characters are underdeveloped in the current meta (IIRC Leffen has said that if mid tiers were as developed as Fox is, they could win majors right now, but I don't think I really believe that), hell a lot of people didn't know about Pichu's guaranteed techchase against most of the cast until a few weeks ago.

This all applies at the very top level of play, which you're definately not at, so if you have fun playing Luigi, play Luigi. Your current skill level is probably very low, so you won't really lose at the CSS with people around your skill level.

And hey, maybe with enough practice you could be the Luigi to make top 8 and push his meta ;) Nothing's impossible, even Leffen started as a Mango fanboy 5 years ago.