Stephen; I like how it sounds, I like that its a Classic name, I like it's meaning, I like the saint Stephen associated with it. However I'm not a fan of names which have been overused.
Stephanie; I absolutely love the way it sounds; feminine but very bright and spicy, not overly soft but not hard and stodgy sounding either. I also think that Stephie makes a pretty nickname, (no reason why you'd have to use Steph, you could insist on Stephie). But, I really don't like both how it's been very overused, and how it's dated in the past. I think it would seem like a middle aged lady name to a child and the people around her as she grew up and then was a woman, and that wouldn't be a pleasing and helpful image for her. You could get round this perhaps, by using Stephie as a nickname.
What about using Stephanotis, which is a plant with pretty white flowers, instead, and using Stephie as a nickname for that? That why you get beyond the oldfashionedness and over popularity of Stephanie both formally and in everyday nickname, and your child could even use Stephanie as a nn if she likes that, (you could use it yourself sometimes?)? Or, what about putting a different feminine spin on Stephen/Stephan by using Stephanissia, (very fussy and frilly if you like fussy and frilly), or - I think this is Italian, I heard it somewhere and loved it - Stephanozza? But, of course that's just what I would do.