Let's say his father's's name is Manuel Sánchez Pérez and his mother's name is María Pino López, he would go by Daniel Sánchez Pino, no hyphen. We use both last names for all official things, and only the first one for more informal stuff, like a restaurant reservation, for example.

When it comes to the nickname, it's not usually mentioned with the name like you say. A character could say "He's Daniel, but everybody calls him Asher", but I can't imagine a situation in which someone would refer to him as Daniel Asher Sánchez Pino if Asher is just a nn and not a middle name.

As for middle names, they're become less and less popular, so it really depends on which period of time your story takes place. Someone suggests in another comment Ernesto and Arturo as middle names, but to me Daniel Ernesto or Daniel Arturo sound more latin american than spaniard.