Hey @Beloved of Assur -- I am a fan of nicknames. And it's fun to have a little side story going of how the character got the nickname. I've been known to get a little creative with nicknames, but I do feel they work well in the stories I've used them.
Write what you know, everyone I know has a last name so unless I am making a concise effort and/or stylistic choice, all my characters have last names. As a utilitarian writer I don't generally use last names to be metaphorical or inherently meaningful, but rather because people have last names. However I will USE last names as a structural tool. Who is called by their first name and who is called by their last name can denote familiarity, intimacy, respect, authority, or disdain. "Virgil that's a funny name for a n**** boy that comes from Philadelphia. What do they call you up there?" "They call me MR. TIBBS!" Even the reserves of calling someone by their first name to show they are friends only works if they have a last name as an option not taken. If they aren't needed for the story you're writing don't use them, but I can't imagine if I'm writing 10 stories not 1 has a last name in it.
You've summed up my thoughts on this. I write crime fiction, and my MC is a Detective. It wouldn't work without surnames. Imagine if he introduced himself to everyone as Detective John, who's on the lookout for his #1 suspect, Dave. Meanwhile, the Chief of Police, Gary, has called a press conference to announce a $100,000 reward for any information in the case of the murdered girl, Sara. If you know Sara, or Dave, please come forward. Every character I develop has a surname. A lot won't get used, and most are only used once or twice. But just like giving a first name to someone, giving them a last name adds to their identity, and character.
Somehow I never came up with a last name for the family in Season of the Witch, though the story deals with three generations of it (and with generations in general, and perhaps even with genesis [to be distinguished from Genesis]). Time to remedy that. Funny, I wrote up Grandpa's story about the witch last night, and he says the last names of a few of his old friends and other people in the small town, but we don't know what his is. Or any of the main characters. Oops!
I'm not really seeing much of a compelling argument for using last names. I sort of feel like I need a good reason to use a last name, and I just haven't written that story with a good reason yet. I understand that some people go to great lengths to create fleshed out characters. These writers know everything about their characters so, of course, it makes sense that they have last names for their characters. I don't work that way. I see some people give their characters a last name, but say that it might only come up in the story a handful of times. I feel like if I'm going to give a character a last name I want some sort of reason for it. It doesn't have to be a big reason or anything central to the plot, but I want it to be so fitting for the character in question that you can't imagine the story even being told without her last name in play.
I'm reading Wild Spaces by SL Coney and it reminded me of this thread because no one in the story has a name (other than the family dog). the main character is "the boy" and he names his dog "Teach." all the other characters are "the boy's mom" "his father" "the old man" etc. i'm 20 pages in before i realized that no one had a name, so i guess it wasnt that bothersome. There's another book that this one reminds me of, too: The Bear by Andrew Krivak where the only two human characters were "the girl" and "her father" (one of the only books that made me cry while reading and afterward )
I give most of my characters last names and it two characters aren't close to makes sense for them to refer to each other by their last names. Also it can be small quirk for a character if they don't like their first name to make everyone call them by their last time for whatever reason that might be
It's funny. I think a last name can have a particular power, when stated at the right point in the narrative, of reframing a character as more than his relationship to the POV. Tommy's antics, Tommy just being Tommy etc... Then at his funeral/obit it's Thomas Abraham Johnson, survived by his parents and younger brother. It hits differently.
The other thing is if your character interacts with any kind of bureaucracy they call them by their last name mug they’re at school teachers will use their last name if they’re in any kind of uniform service superiors will use their last name most letters come addressed to a full name if they get married the celebrant will use their full name if they are in court the judge will refer to them by surname I mean you can write round any of those things but why create problems for yourself when you don’t have to
That is one one thing about Fantasy, a last name is often the town/village they are from. Only the nobility can afford the luxury of a last name.