That fabric is adorable! I agree that I'd like it better in a different color, but wouldn't it be cute for cafe curtains in the right decor? Or fussy cut those houses out to make plush "jewelry" like brooches and pendants? My, my.
What a great idea! I love so much that you are sentimental enough to commemorate your daughter's first Christmas and yet still considered part of your project "frankensteining" her onto felt ornaments!