So after frogging and knitting it again with smaller needles, and several trial and errors with the border, the Watercolor Blanket is done!
Originally, I had planned to add a piece of fabric on the back to hide my less than neat colorwork, but then I just couldn't take it. I felt like there was too much space between stitches for a baby blanket, so I ripped the whole thing out and started again. The original was knit on size 6 needles, which themselves are two sizes smaller than the label recommends. I ended up doing the final product on size 3...I guess I just like my blankies with a really tight gauge. I'm even happier with the way the colors blended with the smaller needles.
After several tries with attaching the fabric to the back, it just didn't seem right still, so I ended up completely bagging that idea and just doing a simple seed stitch border on each side. As far as I'm concerned, the seed stitch is the perfect border; it's simple and clean and works really well for baby stuff. I suspect that I feel this way because a lot of Debbie Bliss patterns include seed stitch, and I love her designs, but I suppose it doesn't REALLY matter :).
This time around I managed to be a lot more neat about switching the colors around, so it actually looks pretty good as is. The blanket I made is up for sale in my Etsy shop, or if you fancy making your own, you can get the pattern here. Let me know what you think!