Hughes hit a national record of 202 not out for Australia A in Darwin last week but was left out of the 14-man squad to play South Africa and Zimbabwe.
That's despite the absence at the top of the order left by David Warner who withdrew from the tour due to the upcoming birth of his first child.
Marsh told SEN on Tuesday that Hughes, with an ODI average of 36.66, missed out simply because selectors wanted Steve Smith in the side ahead of the South Australian left-hander.
Smith has been a Test specialist over recent years, having played just two ODIs since July 2012 and 34 overall since his debut 2010.
He averages 21 with the bat, with a highest score of 46 not out.
But Marsh sees his part-time leg-spin as a valuable asset ahead of this summer's World Cup.
"We've asked him to go away and he’s gone away and made runs and he’s still not in. I feel very sorry for Phil because he’s a terrific young bloke and he’s obviously got a lot of skill but on this occasion we wanted to get Steve Smith back in the side,” Marsh said.
"Steve Smith has been out of the one day side for some time and we see him as a very good all round player.
"His bowling certainly interests us in the limited form of the game and in fact all forms of the game.
"And he's done all that we’ve asked of him in test match cricket and I guess we’ve probably seen that as being the catalyst that’s got him in this side."
The World Cup is in the forefront of the selectors minds.
"Our major focus when we’re talking one day cricket is the cricket World Cup and we are just determined to look at the people we think can play in that World Cup,” Marsh said.
“We’re not saying that the guys that we’ve chosen will all be there, because there are other guys who are just outside this squad who we know about and have used extensively in the past and there are probably a couple more that we’d like to have a look at before we sit down in January and name our squad.”
Rod Marsh explains why Phil Hughes was overlooked
