Midna was not visible to others because she was hiding in Link's shadow.
Why? To keep from scaring people like IHG said.
But scaring people is fun! Especially those pathetic guards.Forget not scaring people, i'd want to let them know I was that wolf so that they'd stop being afraid of me/ attacking.
She's visible when you're in wolf form. Telma's cat can see her.
Not to mention, even in the Twilight Realm, she stayed hidden cuz she didn't want her people too see their princess as an Imp. she was embarrassed, i always assumed thats why she hid till getting her form back!