It is a good design and it really looks cool on you, it is better to make this in dark colors. If you are not sure with this design, then it is good to make this as temporary.
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Body part depends on the size like if the size of your logo design is small then it will look cool on ankle or wrist and if the size is big then it will look better on back.
I think the first option is very good “a pocket watch holding by your hands” and top of your back will be great place to draw this design. I think you should also draw the name of your baby just below the design.
