I understand the concern of having your childs name visible on an item in public - like back packs and such. I would never let my kids do that either.
As far as a baby quilt, I am not sure what your concerns are. Did she ask for the lettering to be very large?
Like the others, I put labels on quilts that I make all of the time. Years fly by so quick and the labels help preserve a moment in time. They are not large labels - here is a picture of one of mine that a lady on this board made for me. I have had different things wrote on the labels.. this is just an example
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