I'm against the formal name decision revolving around a nickname. The nickname may never be put to use, if the child does not want the nickname, and you may have just settled on a formal name. I also don't think nicknames should be planned by the parent(s), but should be left up to the child. I would just scrap the whole thing, personally.
Anyway, Lolly seems more like a pet name than a nickname to me.
Every woman is a mystery to be solved. - "Don Juan DeMarco"