There will always be important differences between the Lytro software output and the toolbox output. The toolbox tries to generate a 4D light field that is as close as possible to the raw image measured by the camera, while still being a standard two-plane parameterized 4D light field. The Lytro software has a very different goal. They do not produce a 4D light field, they produce 2D renders. These are optimized to look nice, and evidently look much nicer than any 2D slice taken from the toolbox output. They use sophisticated decoding and denoising techniques to do this.
The philosophy of the toolbox is to provide a 4D light field close to the raw image captured by the camera, to allow researchers to explore the characteristics of this kind of signal. It should, in theory, be possible to go from the 4D light field output by the toolbox to nice 2D renderings like those produced by the Lytro software.
Note that the issue is not only the noise spread over the 4D signal, it's the colour fidelity. The raw sensor readings are pretty far from yielding colours in any standard colour space, as is generally the case for low-cost CMOS image sensors. Fixing this is however complicated by vignetting at the lenslet image edges. There is substantial work ready to be released into the LFToolbox around dealing with this colour correction, I am seeking collaborators or spare minutes to make this happen. It is mostly a documentation and code cleanup effort at this stage, and the code (care of Mikael Le Pendu and Pierre David, who both pioneered the methods and put a substantial effort into putting the code into the toolbox) is awaiting this effort in the develop0.6 branch.
Hope that clarifies things,
Don