I disagree with projectiles being an issue. At best the projectiles are a minor hassle that move the engagement to the location of Toon Link, but they can't be used at point blank like a few projectiles so approach game is mixed from there.
The reason I say the projectiles are only a minor hassle is because all of Luigi's aerials can cancel or catch all of Toon Link's projectiles(and catching a bomb with a fair is faster than an airdodge too), and he can't spam projectiles faster than Luigi can attack nor does it put Luigi in a bad position. In addition, an aerial tornado will eat boomerangs and arrows and on the ground will clank with everything else Toon Link has except bombs. This means a shorthop aerial can cancel one projectile while giving you flexible spacing and no punishable lag, a falling aerial tornado can cancel out a second projectile and Luigi can tornado towards the opponent where at best the third attack or projectile will clank.
In addition, the aerial tornado's priority over Link's projectiles counters the effect of projectiles aiming at Luigi while off the stage. If you're off the stage and equal or lower than the stage where Link's projectiles are a problem because they will interrupt your attempts to green missile for distance, you'll lose height quickly and fall to your death. However instead of coming in low with the green missile and using the second jump, tornado and up-B to rise back up to the stage, a second jump to a rising tornado both gives you defense against projectiles and lifts you out of he projectile zone so you can fall and charge a green missile to sweet spot the ledge or come over the stage.
I say over the stage because Toon Link is one of the few characters that can potentially successfully ledge hog a green missile sweetspot through his tether recovery invincibility, and that means you need to be prepared to up-B after the green missile, or sometimes it means you can end up underneath the lip of the stage on the green missile lag, like on final destination, and are unlikely to be in position to up-B recover in time. These last two points- link's tether edge hogging and projectiles gimping your recovery are not inclusive to each other, and you won't have to recovery like this every single time. Very likely you'll be hit so where you are recovering from a height that is above the stage and these things won't be as much of a problem.
Toon Link's aerials aren't so much as better than Luigi's Aerials as they are equal. Before you get incredulous realize that both Luigi and Toon Link have fantastic aerials and is a real strong suit for both of them. For the most part, Toon Link's Aerials aren't as fast as Luigi's because they have more after-lag, his bair being the exception. Same thing with range, the range difference isn't all that different between Luigi's and Toon Link's aerials and with Luigi's Bair there basically is none. That puts them both largely on par with each other.
I think this video linked by hippiedude92 just two posts above
http://www.youtube.com/watch?v=odgSOi2jda4
Has a good example of the approach game that really goes on during the second stock, you see a lot of shorthop aerial spacing between the two players. One thing that VirtualVoid doesn't do that I would do is after one of those shorthops I walk into a downsmash(there is also shorthop aerial to falling aerial tornado-grounded tornado approach and dash to upsmash after a shorthop, but Void does those in the video). Mostly you can see the whole mix of shielding, shorthop double aerials, spacing with their aerial mobility, grabbing(an advantage for Toon Link, look to spotdodge it) that really makes up the majority of this match. Overall, favoring your Bair for this helps a lot, and I'm understating things a bit there. IMHO, if you can deal with the speed and spacing ability of Marth's fair, you can handle anything Toon Link has.
Luigi has better KO % than T. Link here, but that won't win you the match up itself. This is largely an even match(that means a 5/10), and I don't hold the belief that the projectiles are much of an issue at all, or basically that either character presents any weakness to the other.