Fabric Letters

My daughter is now 5 months old and I thought it would be nice to make a big fabric "E" to hang above her bed.  If I am really motivated, it might be nice to actually spell out her whole name - Esther. 

I went to the fabric store today and, as usual, I bought more than I probably needed.  Now all I have to do is figure out the best way to create the letters.  I am browsing the internet for some ideas, but can't seem to decide.  Here is a picture of her room now:

Here are some options that I found:

I like the orange "r" because it allows you to embellish and add buttons and other accessories. 

The "e" below is cute too, but I envisioned something a little puffier. 

I remember seeing someone's blog awhile ago that had made fabric pillows with letters on each one - so when the kids are having a pillow fight or building a fort, they were also learning their ABCs. 

I like how this one looks, with a variety of fabrics:

Your thoughts?