No, no, that's perfectly fine. Calling each other by first names builds a sense of closeness, and that's a good thing.
Literal
No-no, fine fine. Below [gen-の] name [with-で] call-each-other [topic-は] closeness [subj-が] well-up good thing [copula-だ].
いやいや is a reduplicated dismissive 'no no / not at all.' 結構結構 'fine, fine' doubles for emphasis. 下の名前 'first name' literally 'bottom name' (Japanese convention: family name on top). 親近感がわく 'a sense of closeness wells up' uses わく (湧く) for feelings emerging naturally. よろしい is the formal/polite version of いい 'good.'