Captain Toad: Treasure Tracker producer Koichi Hayashida has cleared up the confusion regarding the Toads. Hayashida says that the Toads are a genderless race and that Toad and Toadette aren’t siblings and they aren’t romantically involved. If you’re interested here’s what he had to say on the subject of Toad and Toadette.
“This is maybe a little bit of a strange story, but we never really went out of our way to decide on the sex of these characters, even though they have somewhat gendered appearances,” Hayashida said. “But I think what I can say is that Toadette and Toad are not siblings — perhaps it would be more accurate to say they are adventure pals. And that’s certainly true here [in Captain Toad].”
Hayashida clarified that Toads are not mushrooms at all, but the resemblance and nomenclature is too uncanny not to wonder. “This particular riddle might stay unsolved,” Hayashida said. “That’s one of the great mysteries of the Mario universe.”