Hi,
Well, if your character is a mecanim character, then you must use Mecanim and setting mecanim animator variable is the way to go indeed.
else, you can't mix legacy and Mecanim I think, at least, I never tried personaly and never will

I would suspect some major potential issues in doing so.
the "move toward" is fine, it's simply that your character has to be be animated "in place" for this to work. Check out the Pathfinding / Mecanim setup, it uses this, because pathfinding agent is moving by itself, the mecanim logic and animation has to comply to this, as opposed to a mecanim animation that actually moves the player as well as animating it.
does that make sense?
Bye,
Jean