No, upgrading Toast won’t help for this purpose, and will have the same result. You have to tweak your workflow:
So you had Toast convert your MKV to DVD-Video. If you have Toast still open, you should have an .m2v in the Roxio Converted Items folder.
Move that .m2v to another folder (to preserve it), e.g. together with your input files.
Rename the .m2v and original .ac3 files so that they match. The base filename will be the suggestion for clip title in the menu, but you can change that manually later.
Then set Toast up to make a new disc again. Add the .m2v file. Toast will know about the matching .ac3 file automatically. Set disc title, menu, menu title, clip description, etc. as your would normally. File > Save as Disc Image. Let Toast create a .toast file. This will be fast, as the conversion has already been done. Mount the disc image file as a virtual disc. Play in Apple DVD Player. Check for audio channels again.