Thanks you for all the nice comments, everyone.
Here are some answers to the questions you have asked:
I has the train idea in my head but couldn't find a pattern that I liked. I wanted something simple like the "Sunbonnet Sue" applique that my great grandma used to make. My BF drew the design for me based another quilt I found where one large train engine was constructed out of many quilt blocks.
I have posted the pattern here for those who were curious. I'd love to see what you create with it!
The shaded areas are cut out. Once I got going, I figured out I could zigzag stich through the smoke stack cut out as I outlined the engine - so I only had to pick up the needle once, for the window. I added those directions to the pattern.
Each block is a different material, some of them are scraps from items I've made for other family members, most of them are from fat quarters or remanants that I collected. I tried to use things that a 5 yo would enjoy, but that weren't too childish, so the quilt would hold its appeal longer.