The woman was rude. That said, I can sort of see her reaction. Prissy, in my experience, is not a positive descriptor. If I heard a kid being called prissy boy, I would think the person calling the kid that was being mean. And I concur with the other posters- in 3-4 years, when he enters school, that nickname could be a real liability. And they have a way of getting out- all it takes is a slip of the tongue around the wrong person and he won't lose the nickname until he finishes high school or moves away. Prissy just doesn't seem like a positive thing to call anyone, boy, girl, man, woman. I know your family is not being mean, but I strongly advise you to change his nickname in public, if not in private.
And I think Frog or Frog Prince are both OK. I like frogs, as do many people. My Dad calls me Katydid sometimes, though he is the only one. Insects, amphibians and reptiles are not bad- I doubt anyone would object to the kid being nicknamed Kat or Kitty, so why the prejudice against amphibians?
Sorry, I've been working nature camp and trying to teach kids about the joys of snakes and toads this week!