DS's name is Michael and we call him Mickey. I hated his "official" name and told everyone to call him Mickey, but some, especially my father still called him Michael. It's annoying, but that is his name so I can't say anything. If I didn't want people to use his name, I shouldn't have agreed with DH to use it. At this point, the name has grown on me. He is also really only called Michael at preschool since he tends not to listen when they say Mickey. I've started calling him by his full name too.
It stinks that your aunt is doing it to spite you, but I say suck it up. It's usually the older people who insists on full names, and you never know what the future holds. Your DS may actually prefer Joseph over Joey.