IIRC everybody wanted a short, stacked guy with a bad attitude to play Wolverine and here comes Jackman, who wasn't exactly jacked up before the role, and he's like 6'2", and he was more famous for doing theater at the time.
He didn't really jump off the casting page as the type of guy you'd cast in that part.
E...
Right, this was my recollection as well. Man, that was a LONG time ago...
I do recall a lot of people wanted Danzig, who would have been awesome but who knows whether the dude can act. Jackman was largely an unknown at that time I believe.
He's made the role his own though, hard to imagine anyone else doing it now. I give him props for a job well done.