Although I like the "traditional" baby quilt colors I don't feel that a baby quilt always has to be either blue for a boy or pink for a girl. I think what you chose for this quilt will fit the likes of the family perfectly and they will love it. I think it is adorable!!!
I like your red ric-rack idea, or maybe use white cotton eyelet lace for a border finish, either should "girl" this up.
Really precious quilt!!
PS-OK so I did not read through the thread first....LOL. I guess my suggestions go along with the majority!! :D