Blue Toad and Yellow Toad are the Mario Bros. young apprentices
Sidekicks in training. Somebody has to pick up the torch when the Mario Bros. are dead. Or maybe just when they get lazy. Or have to go deal with some other princess in some other land. Or whatever
If Paper Mario is NOT an alternate reality...
...Mario sees it like anything else. Instead of 120 Power Stars, it's 7 Crystal Stars. The missions to get them are pretty much the same in his eyes except everyone is talking too much. Scenes like Jolene and her brother's tearful reunion, Mario is standing there thinking "Sheesh why can't I get the star? This cutscene is too long, I see the star, I want-a the star gimme it." Bobbery's broken spirit and tragic past with his wife, Mario is thinking "Okay Mr. Bob-Omb Buddy can you open up-a the cannon now? I really need to go to an island level so I can get me a star, c'mon. Err not cannon, boat? Okay this puzzle is too complicated, where is a Wing Cap?"