I'd bind it with the blue for these reasons:
- the borders already change from dark to light to dark - a fourth change to a narrow light binding would be busy looking and detract from the center, not add to it
- the same would be true for adding a light edge flange with a dark binding - too many outer changes on a small quilt especially
- from a practical standpoint, bindings are the first to show grime, solid bindings even more so than prints - a solid yellow binding on a child's quilt is apt to look soiled one day out of the laundry
- most popular solid fabrics (broadcloths) have a lesser thread count than prints (60 square compared to 75 square) and, when used as binding on a heavily used/laundered quilt, can show wear much faster than the body
So, that's why I'd bind it in the matching blue, not the yellow nor the yellow edge flange. It's very pretty, nice job. Whatever you decide will be very well loved indeed.
