Thank you all for great feedback. To be more specific, it's primarily an heirloom piece. I've started a tradition of making a quilt for the first child in my best friend's kids' family. They tend to be used for pictures rather than hard-used blankets and, to that end, I will add a hanging sleeve.
I use Dritz fray-check to stop ribbon from fraying but it does dry crispy like nail polish.
The appliqué is not for the name, I will embroider the letters. The letters and the appliqué butterflies will be in the middle of the quilt. I wonder if overlaying the middle of the quilt with tulle to protect baby and appliqués is worth exploring. I've seen that technique used in art quilts made with tiny fabric scraps.
Your valuable, expert thoughts?