I say if you love the nickname just go with that name. We are going with a girl's name that we absolutely love the nickname of, but don't like the long name quite as much as the nick name - if that makes sense.
ITA. If he loves Toby just go with that...not everyone has a name that is a 'proper' lengthenable (sp? ) name. My name is just Kim, not Kimberly and my DS is Nate, not Nathaniel, because we preferred it by itself and can't see the point....