First, let me say I am loving what you have so far! I think that the plan you have will work fine. The best thing to do is make all the block until it is the size you want and then play with them on your design wall. I am thinking that the panel in the middle will look good but maybe you would like it with the panel on the top and all the blocks under it. Sort of like the fancy part of a bedspread that used to go over the pillow? Just an idea, play with them until it looks right to you. I have also seen some really nice baby quilts on QB with the name appliqued at the top or bottom, that might be an idea too.