I think you're on the right track on both counts. The red in the template makes the logo look out of place, like it doesn't belong - and the logo is a very important aspect of your branding, so playing it up would be a good thing.
And I think a background color around the template would make your content pop more. And would train the visitor's eye into the middle where you want it.
I really like the site, though - I just love little kids' furniture! I hope you do well with it!
Have you been to one of Lynn's free webinars on Tuesdays?
http://www.selfstartersweeklytips.com/webinars.htm
We all learn so much from her there, because, even if she's not talking about your site - you might get tips from the critiques she might give of 'my' site.
And the camaraderie is great, too!