I agree with Geri -- go for big stitch quilting if you can.
I have just started on a Holice Turnbow stamped wholecloth for my newborn nephew. We wanted cotton, so I got Hobbs Organic 100% cotton. There are no seams, but it is still insanely difficult. Still, I'm glad that at least there are no seams since I have done some small amounts of hand quilting on my larger crib quilts before if it was on a smaller scale because I couldn't manage that on my machine at the time. You don't need to buy a stamped wholecloth. You could just buy a piece of fabric in their favorite color(s) -- or even a cheater cloth -- and avoid the thick seams. QD Request is ultra thin & the easiest to quilt through, but it gives almost no definition to the quilting (which seemed a shame to me, so I went with the Hobbs).
At any rate, I spent quite a bit of money on the supplies. The hand quilters here could advise you whether you need a hoop or not if you go very small. Typically, it's the weight of the quilt that allows hoopless quilters to work on their lap. In addition, I spent 3 weeks studying & practicing before starting. It will probably take me 250 hours to complete a crib sized quilt that is mostly 2" cross hatch quilting (basting, quilting & self-binding). If you really want to practice hand quilting, go for it! But I hope your friend realizes what an amazingly generous gift you are giving her. Where I live, hand-quilted baby quilts sell for $3,500+. I can't imagine giving (or getting!) such an extravagant gift!