Something that I probably subconsciously believed, but was made aware of the idea while responding to a posting on the Official Chat for the show: Pinocchio was made from a branch from a magical tree, the same tree that Geppetto carved into the cabinet for Snow to escape Fairy Tale, and in which Emma was sent into our world. So he was part of the tree to begin with and could be hidden within it without the tree realizing there was a second person in it.
Someone on the Official Chat suggested that the real Baelfire is Henry's father. I find that very interesting and entirely possible. Emma has stated that Henry's father was older than she is, and if Bae entered our world at roughly the same time as Emma, or even a few years before, Bae would be at least 14 years older than Emma. And because Mr. Gold knew that Bae was Henry's father, he brought Henry into Storybrooke, so he could keep watch over Henry. I think Regina once asked Mr. Gold where he found Henry (something like that), and I don't think he answered her. Remember, Regina doesn't know who Emma is, only that she's Henry's mother and that she's changing things. And while Mr. Gold hasn't found Bae, perhaps he believes Bae will come to find Henry. Food for thought.