How should I fix my different sized nipples? (Photo)

Creating a scar inside the areola will likely leave a pale or hypopigmented scar and is generally not advisable.

You have some asymmetry in both the size of the areola and position of the breast. Reducing the size of the larger areola will correct one issue, but you will still have some asymmetry between the breasts. I encourage you to meet with a board certified plastic surgeon to discuss your concerns and learn more about your options.

I would not suggest an incision inside the areola because the scar  tends  to be more noticeable in that location. Yes, the procedure can be done under local anesthesia.

In considering whether to have this procedure done you should be aware of the potential downsides.It is important to know, for example that the areola scar will always be noticeable (some more than others). This may be because the scar heals with too much or too little pigment or because the scar is raised. You should also be aware, that areola reduction surgery does carry other risks such as spreading of the areola, asymmetry, shape irregularity etc. in order to avoid disappointment, it behooves you to be aware of the worse case scenario and, armed with that information decide whether to proceed with the procedure or not.

I hope this helps.