CMS/Colloquium knitting: in which I magic-loop with a 16" needle and then frog.

I worked on the Trieste cardigan for my niece in CMS and colloquium yesterday afternoon.  Somehow it didn't enter my mind that the circumference of a baby cardigan would be too small for a 16" circular needle.  I felt a bit stupid, but the magic looping worked okay, and by the end of colloquium the work was large enough to stretch around and knit normally.

Here's the good news:
I'm so excited about the steek!  I am pleasantly surprised at the way the columns of twisted stitches mark it off (you can see this clearly in the top photo).  Also, my gauge is right on (6.5 stitches/inch and 9 rows/inch - the called-for gauge is 26 stitches and 35 rows per 4").

Now comes the bad news:
The picot hem at the collar just does not look good.  The pattern said to work 6 rows stockinette, then the picot row, then 5 rows stockinette, then the knitting together.  The 5 rows and 6 rows do not match up, so the picot row is a bit toward the outside, not right at the fold.  In real life, it looks way worse than in this photo:

So that's why I'm frogging it.  I think the fix is to start with 5 rows stockinette, beginning with a purl row, then the picot row and then on with the pattern as written. But now that I'm starting over anyway,  I'm second-guessing the sizing, too.  I'm thinking the 3-month size might be too small for my niece to wear this winter.  She'll be 3 months old in mid-December, and according to the Craft Yarn Council of America website, even a 3-month baby sweater should be larger than the 3-month size of this pattern.

So the long and short is, I'm pretty sure I'm starting over with the 6-month size.