Is there a way to do character selection with new input system local multiplayer? Like be able to spawn a object and assign the controller to a certain user?
Sure.
That is, in fact, one of the many features and uses of the PlayerInputManager. Just gotta learn how to use it.
I thought I had already expressed that. 
Just giving them the name of the component to look into.
Player input manager has two event “Player Joined” and “Player Left”, it will tell give you the Player Input component when new devices is attached to the system, and you can subscribe the character input action the Player Input you get.