I guess the fundamental problem I have is the idea that living things start good, and then get worse.
Oh, I don't necessarily think good/bad is the way to go. We as humans are observed (especially as children) to instinctively gravitate towards what gives us pleasure (in the widest sense) and to recoil from that which gives us pain. It's not good or bad. That's just what happens. As adults, we should learn - per Epicurus - how to do that skillfully to provide ourselves with a maximally pleasurable life. Some adults find other motivations and stop listening to their pain/pleasure guide.
Yes. I agree with this, and that's what I think makes the cradle argument unnecessary. We all do it, not just infants. I'm perfectly fine with saying, "See, it's easy to see how infants seek pleasure and avoid pain. They have simple goals." You could then say, "Older people are more complicated. They seek pleasure in more advanced ways, and they often appear to seek pain in the short-term. But they hope that will bring them even greater pleasure later."
I think that is a great formulation. It avoids the "infants are just better" problems.