I went through the exact same exercise 6-7 months ago.
I settled on the DA70 at the time.. it was my first Pentax glass and I was instantly hooked by the improvement over the Sigma zoom it replaced*.
I got some great photos, however I found that 70mm was a bit long for indoor shooting a newborn, and also that I could have used a little faster than f/2.4 (our daughter was born in Autumn, and we live in the Adelaide Hills, so for the first few months of her life, the blinds were drawn to keep the heat in, so the light was not great).
I borrowed an M 50/1.7 and got some nice pics with this too, but found the manual focus (or my slowness using it) was a problem (I also hadn't discovered "Catch In Focus" mode). Also, even at 50mm I found if she was lying on the bed, I had to stand on the bed to get most of her in the frame, so I reckon the 40 is probably just right.
I also tried the flash (AF540FGZ, bounced), but it still seemed to startle her, so I tried to stick to natural light.
Nick
*Since then LBA has hit me hard
JSherman999 and his damn 15mm limited mind control thread was the start, and then those DA*16-50 and DA*50-135 "Show us what it can do" threads pushed me over the edge..
I sold the 2 kit lenses and the DA70, and now have a DA*55/1.4 for nice indoor low light work and nice bokeh, a DA*16-50 and a DA*50-135... oh, and a significantly lighter wallet.
Here are a few examples :
DA70 @ f/2.4 1/60 (1 week old)
M 50 @ f/1.7 1/40 (3 months old - standing on bed, only light source was a 75W bulb overhead)
DA*55 @ f/1.4 1/50 (4 months old)
DA*16-50 @ 50mm f/2.8 1/50 (6 months old)