I deleted everything I wrote because on studying it yet again, I really think just adding a black piece to the portion that's cut short - like a huge skinny triangle, and squaring that up - would be fine.
If you quilt the borders a bit heavily - even just with straight lines - it will hardly be noticeable.
And let's remember the intended recipient.
If he/she can't even spell yet, then I wouldn't worry about he/she verbalizing any complaints. ;-)
Really, I know I'm usually the first to always say things should be fixed.
But I think here the puffy letters are going to be the star of the design.
This is not something to beat yourself up about.
The only other thing I might suggest is to find out if this panel was part of a collection in which the B&W stripe was a coordinating fabric - then just get yourself the smallest cut you can and attach that.
Otherwise, it will be wonderful.
Really.