Wild to think about how 'Li'l Petey' ended up with that name — it's kind of a double-layered nickname that stuck to him like gum on a shoe.
In-universe, the short form 'li'l' literally marks him as the little scrapper he was when he first showed up on the block: tiny, quick, always getting into mischief. 'Petey' is just the kid-name for Peter, but in his case it came from a grandmother who mispronounced 'Peter' during a lullaby, and the neighbors started calling him that because it sounded affectionate and ridiculous at once. Over time the full moniker became shorthand for the whole persona: cheeky, stubborn, and oddly heroic in small ways.
Out-of-universe, the creators leaned into that old-timey American comic vibe — think small-town strips and vaudeville nicknames — so the name reads both nostalgic and intimate. I like that the name feels lived-in: you can hear neighbors, barbers, and old friends calling it out, and that makes the character feel instantly familiar and oddly warm to me.