Are you saving your lettering in the right size hoop format? There should be somewhere telling you to select hoop size when you save it. EX. 4x4 or 5x7, Most machines have it in mm though!
On a 15x15 blanket, I would not do it too large. Depending on if you use tearaway or cutaway stabilizer, you don't want the embroidery to be bulky. I probably would do it no larger than 2.5 inches.
Hope this helps. That's a pretty name!