That's adorable. As for the yarn.. I think a solid would show up the cables and pattern better, but it would still be cute.
As for the yarn..have you used Cascade 220 before? I used it (non superwash kind) for some charity items and even after soaking in hair conditioner I found them rather rough and not soft. I am extra sensitive though myself so it may be fine for anyone who isn't sensitive to wool at all.