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I like Kailani, though more so when I was younger. Now I do find it a little "cutesy", as you put it. You do have Kai and Lani to fall back on as nicknames -- somehow, they actually sound less cutesy.

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I don't like Kaylani though; it looks odd and appears to change the pronunciation. The first syllable of Kailani rhymes with "sky", while Kaylani is like the name "Kay". I don't think changing the i to a y is necessary at all.