Are you planning on putting the photos of the birthdays into this too? or just the signatures? If photos too... then definitely go with the 12 x 12. You could either place the signatures on a separate page or design the LO's first and then place the photos... with the signatures as part of the design. Either way, you'd have lots of space for everything.
If not, or just one or two representative ones... like of the cake etc... just the standard notebook size would probably give you enough room.
As for the color, I'd just go with the pretty not so neutral coloring. It'll be more appealing for her as a child most likely and the stuff inside will appeal for her as she ages... so the color outside won't matter so much.
And there are some good quality 3 ring binders out there too... like KMA for instance.