What is the size of the panel showing? It looks almost big enough for a baby quilt. I would pick the bright colours in the panel, blue, green and orangey red and cut squares. 8 to 10 inch blocks added all around the panel should make it big enough and you could quilt in the characters faces in their coloured squares.
Or you could set the panel to one side and add larger blocks down the other side and appliqué the child's name in the blocks of colour.