I have no idea as to why you think you are toxic. It seems you are doing just fine and are expressing normal concerns. It seems his little girl feels jealous of anyone who takes attention away from her. I don't know if this is normal or not, since I don't have kids. If it's a serious problem, she may need some therapy. I know that after my parents split up (I was 5), I experienced a lot of separation anxiety. I also hated anyone who dated my mother, since I feared them taking my father's place. I did go to therapy though.
Anyway, it sounds like you have some thinking to do. What do you want out of this relationship? Can you handle bring a mother to his child? It's common to question whether or not you will be a good mother. Do you even really want a child? It's ok if you don't. If you do have a child with him, I wouldn't worry about the experience being any less special. Having a child with you, the woman he loves, will be just as special and completely different from his first child.

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