I hand quilted 2 quilts about 10 years ago and both have held up great.. I made my son a quilt last Christmas and it was handquilted.. He washes it all the time and it looks like it did the day I finished it.
I do think a baby quilt would be wash alot.. However I agree if you want it to end up as more of an heirloom I would hand quilt it. I quilt pretty loosely so they drape alot and I have always used warm and natural but I think next time I will try Hobbs 80/20 I hear great things about it.
I really suck at machine quilting even with aton of practice.. (I like to blame it on the machine) I actually prefer hand quilting things. I think they look so much nicer..