We are going through the same thing with our daughter. She got fungus (or so we think) on her right big toe which spread to her other big toe. Like your doctor said, ufortunately the medicine out there is too strong for young children and even still it's only about 50% effective. From what I hear, you can live with fungus for the rest of your life and really only try to keep it at bay with medicine or topical cream.
My pedi did take samples of her toe nails a couple of weeks ago to make a conclusive determination that it is indeed fungus because I guess some people are born with nail growth abnormalties. We haven't heard the results yet but I'm hoping it just the way her toenails grow - I'd hate for her to have to deal with fungus.
I'm sorry that I don't have any advice just wanted to comment I'm right there with you.