Am I making the right decision?
In my opinion, yes. A hybrid bicycle is just that - a hybrid. It's designed to be able to do both road and off-road riding.
As a result of the compromises necessary to do that, as a road bike hybrids make really good mountain bikes, and as a mountain bike hybrids make really good road bikes.
Given you posted this:
I ride only on tarred roads. I don't go off the road.
I think it's safe to say a road bike will probably fit your needs better.
If you wind up going faster, that just means in your one hour ride you go 25 km instead of 20.
Just be careful how you set up a road bike. You're probably not used to riding a road bike in an aggressive aerodynamic position, with your saddle way above your handlebars, your body rotated forward with your head and shoulders low, trying to present a small frontal area to reduce drag. The added speed you feel riding like that might feel great on a five-minute test ride. 30 minutes later you might not feel so good, with weight on your hands and arms that you're not used to and a saddle causing "problems"...
So, don't get very aggressive with your bike fit - yet. The drop bars on a road bike aren't there just so you can be aerodynamic. They also give you a lot more hand positions that you can use over a long ride, improving your comfort. You can always modify your position later.
My bike dealer tells me that the size of the road bike should be one less than a hybrid. That is, if my hybrid is Large then my road bike should be Medium. Do you agree?
In general, I don't think I'd agree with that but your dealer is saying that with a lot more information about you than we have. He can probably just look at you and tell what size road bike would most likely fit you, and it's not clear from your post exactly how your dealer meant that. Did he mean it for everyone, or just for you?
Your best fit will depend on how you want to set it up, and different road bikes do have different dimensions that can affect the proper size.
For example, if you have shorter legs and a torso that's relatively long for your height, if you wanted a full racing-style road bike with a really low aerodynamic fit, you might need a larger size in order to get the long top tube required to fit your relatively longer reach because of your longer torso.
But you'll probably want more of a "comfort" road bike initially - one with a more relaxed, upright fit. The easiest way to identify those will be by head tube height - that's the tube between the handlebars and front wheel. The taller/longer that tube is, the more upright your position on the bike will be. And a small difference here - even just 2 or 3 cm - will probably make a big difference in how the bike fit feels.
Don't go too far into the "comfort" road bike setup, though. You don't want a high head tube on your first road bike to limit you from getting more aerodynamic later if you want to. I'd recommend a first road bike be fit so that you have a few spacers needed under the stem, with the stem set up with a slight upward angle. That way you have the option later of adjusting your fit by lowering your handlebars. If you buy a full-comfort style road bike that already has your handlebars set as low as they can go, you won't be able to adjust your fit by lowering your bars later.