The caster can choose any point in range, and try to cast a fireball there.
Whether there is a clear path, or not, is not relevant at this stage : the character is blinded, and can't know if there is one. A blinded character shouldn't be allowed to detect obstacles for free when targeting a point for an area of effect spell.
Hence, he can choose any point in the spell's range.
It will most certainly backfire.
V2Blast appropriately reminded of the clear path to the target rule :
If you place an area of effect at a point that you can't see and an obstruction, such as a wall, is between you and that point, the point of origin comes into being on the near side of that obstruction.
Obviously, there is an obstruction between you and any point outside the toad : the Giant Toad itself.
The fireball's point of origin will be located on the near side of the toad's belly, an the spell's full effect will remain inside it. Only the toad and the wizard are affected. Probably.
Though very unlikely, the DM might decide there's an occasional clear path somewhere :
- The swallow attack doesn't explicitly grant full cover to people outside. At least some air is passing, as it does not provoke suffocation.
- As Large the creature may be, a fully-geared adventurer isn't a light meal. Parts of it are probably still stuck in the throat of the toad.
He might call for luck here, and allow a (tiny) chance for the spell to resolve as expected by the caster. If not... Not only will the fireball's point of origin be located inside the toad (affecting again the toad and the wizard) - but it will also expand to a 20-foot sphere centered on the toad, as the fireball spreads around corners.
This might be effective - if the caster has some way to mitigate fire damage, and is surrounded by opponents.
No, your "god" was right.
As the giant toad's stat block clearly states:
The swallowed target is blinded and restrained, ...
This means you can't regain your vision by creating light inside of the toad. A blind man with a torch in front of his face is still a blind man.
Note that a spell like Darkness never gives any indication of the "blinded" condition:
Darkness spreads to fill a 15-foot-radius sphere for the duration. The darkness goes around corners. A creature with darkvision can't see through this darkness, and nonmagical light can't illuminate it.
This means the effect of the spell can be ended with a powerful enough source of light.
You could bargain with your god and make a clear agreement on how your table is going to handle this issue in the future, but bear in mind that they are technically correct.
Best Answer
Yes, you can escape via other means
Ways they can escape, aside from killing the Giant Frog
There are other ways small creatures can escape, aside from trying to kill the Giant Frog. Here is an incomplete list.
Find Familiar's vision swap (Action) + Misty Step (Bonus Action)
Clairvoyance (Round 1 Action) + Misty Step (Round 2 Bonus Action)
Enlarge/Reduce or Wildshape: The small creature can Enlarge itself or Reduce the Giant Frog. Either way, the Frog may have to spit out the swallowed creature. This is not necessarily what happens, depending on the DM. But as the Giant Frog can only swallow small creatures in the first place, it makes sense that if that swallowed target grew in size while swallowed, the Frog has to spit it out.
High level escape spells: Blink, Freedom of Movement, Dimension Door, Teleportation, Plane Shift, Etherealness
Gaseous Form: the creature can pass through pin-hole sized openings while in this form.
Stinking Cloud: on a failed Con save, a target inside the area spends its turn "retching and reeling" -- as in, vomiting.
Pushing Attack: On a hit, the Giant Frog must succeed a Strength save or be pushed back 15 ft away from you. The exact thing that happens here is DM-dependent, though, as it's easy to imagine a DM who will disallow this on the basis of reality (you can't push someone away from you if you are inside them, after all).
Generally, enchantment-based spells will not work because you need to be able to see the target. However, you are blinded while inside this monster and thus can't see.