I've made many wool applique quilts, they launder beautifully. I generally use wool on flannel for kids/baby quilts- makes for wonderful soft, cozy, snuggly quilts. I don't know that I would want a quilt all wool for a baby. Not because of laundering ( wool launders, wears and holds up better than cottons) but because people sometimes have reactions to wool & baby's skin is very tender/fragile. All wool would make a very heavy quilt. Hobbs and Dream wool battings are my absolute favorites! Lightweight, lofty and wonderful! That is a very cute pattern. I would use cozy, soft flannel for backgrounds and wool for the appliques... But that's just me.