I'm sorry to bring this to light, but... If you notice, in Super Mario Bros. and Super Mario Sunshine, Toad does not appear. Instead, Toads do. And, these ordinary ones wear vests that match the spots on their heads. THE Toad always has a blue vest and red spots (except SMB2, but that's because... you know.). Contradictions to this idea are Luigi's Mansion, Paper Mario and others...
Yeah, so, Toad isn't in many non-spin-off games as an individual... Yoshi is in the same situation. He's always there for spin-offs, rarely in real games, but you can't really tell the difference between him and another green Yoshi. Super Mario 64 DS is a rarity for this.
Toad's arguments are all valid (though there's not really a specific Pikachu of note, unless you count Yellow version, as I don't accept the anime to pertain to the games. But if that were the case he'd be under the control of Red, right?). But... it just wouldn't fit. If the Toad Peach uses as a shield had a matching vest and head to make him seem more like a Toad rather than Toad, it'd work... Super Paper Mario is Toad's most recent non-spin-off appearance, at the game's opening. Luigi addresses him as such, doesn't he? Maybe all he needs is more dialogue and recognition in games, a more distinct personality... more to distinguish himself from that Toad over there. I think making the matching vest thing more consistent would be the easiest way.