In addition to Laxus, Wendy could be a main character in this fanfiction. She might use her healing magic to see if there are any underlying issues with Laxus being turned into a baby. Happy could also be there, providing some comical relief. He might try to play with baby Laxus using his fish. And Makarov, the guild master, would be central as he would be the one with the most knowledge and resources to deal with the situation.
His guildmates would surely be main characters. For example, Natsu could be there. Natsu might be really confused at first but then would be super protective of baby Laxus. Another could be Lucy. She might be the one who is more practical in taking care of the baby, like making sure he has proper clothes and a comfortable place to sleep.
Well, perhaps the story could start with a powerful magic spell gone wrong that turns Laxus into a baby. His friends might be shocked at first. They then have to take care of him, like feeding him and changing his diapers. It could be a really comical situation with his big, tough personality now trapped in a baby's body.
The antagonists could be dark guild members. They might hear about the special baby that Lucy and Laxus are involved with. Maybe the baby has some sort of powerful magic within it, and the dark guild wants to steal the baby for their own evil purposes. So they constantly try to attack Lucy and Laxus to get their hands on the baby.
Mario would definitely be a main character. Since Luigi is his brother, he would be the one most concerned about Luigi's transformation and would do everything he could to help him. Princess Peach could also be a main character. She might offer her castle as a safe place for baby Luigi and use her resources to find a solution. Toad could be there too, helping Mario with taking care of Luigi and providing useful information about the kingdom that could lead to reversing the spell.
Perhaps a mysterious stranger. This stranger could have some connection to the reason why Edward turned into a baby. And then there's Edward's pet dog. The dog might be confused at first but then becomes very protective of baby Edward, adding an interesting dynamic to the story.
Her best friend could be a main character. They might be the one who is most affected by her transformation and has to take on a lot of responsibility in taking care of her.
Erza could also be a main character. Given her strong and motherly side, she would probably take on the role of taking good care of baby Lucy. She might be strict about following a routine for baby Lucy's care. Happy, the flying cat, could be another important character. He could use his unique abilities to search for clues on how to turn Lucy back to normal.
There could also be other supporting characters from the Fairy Tail guild. For instance, Mirajane might play a role in giving advice to Lucy about pregnancy and motherhood, since she has a nurturing side. And Makarov, as the guild master, could be involved in ensuring the safety of Lucy and the future of the guild with a new member on the way.
In addition to Naruto and Laxus, there could be characters from the world where Laxus comes from. Maybe some of his comrades in the magic guild. They could be curious about Naruto, or they could be skeptical of him because he is from a different world. And of course, the villains in the story would be important characters too. They could be after Naruto's power or trying to disrupt the balance between the ninja and magic worlds because of his existence.
Obviously, Laxus is the central character. He is a powerful mage in the Fairy Tail guild. His character is often explored in terms of his growth, his relationships with other guild members like Natsu and Erza.
One possible plot could be that Lucy and Laxus accidentally end up having to take care of a baby together. Maybe they find a lost baby during one of their guild missions. At first, they're both really clumsy and unsure of how to handle it. But as time goes on, they start to develop a bond not only with the baby but also with each other in a new, more family - like way.