Welcome!! You can start with any dk weight yarn, and then do a swatch to get your gauge just so.
I've done many children's sweaters with Plymouth Encore, worsted and dk, and it washes and dries beautifully. In fact I made the sweater from that book with the farm animals on it. It's a blend.
If you want wool, there are superwash wools out there, too, that come in dk weight and don't have to be handwashed. Dale of Norway Falk is one, off the top of my head. But if you want the Merino Style, that should work find, but again, just do a swatch.