The recipe indicates the hazelnuts should have their skin on, does that mean I don't need to toast them and can use raw nuts?

Yes, you don't have to roast the nuts.
I found his same recipe on a food network site, and there also, no mention of roasting.
http://www.foodnetwork.com/recipes/mario-batali/chocolate-biscotti-recipe.html
But, if you wanted, you could roast them for extra flavor.