Its all about the light. Indoor shots often come out poor because of the poor light.
What seems adequate to your eye is usually not so for the camera...Indoor lights also cause a lot of problems due to the different color casts they have, usually too yellow or blue tinge to everything.
-If possible shoot where there is plenty of daylight lighting the room - but not direct sun.
-zoom in so that you are using between 35-55 mm length of the lens.
-Shoot in P mode.
-White balance on daylight or auto
-Place ISO to auto ISO 100-400
-Half press the shutter button and see if your shutter speed reads at least 1/80 or faster. If you dont have steady hands at least 1/100
-If you are getting slow shutter speeds like 1/30 etc the pictures are not going to be sharp so you will need to change location to where there is more light.
-Dont keep moving the baby to do this
. Place a doll or some object in the locations you want to shoot at until you find a location that gives you the shutter speed.
-In an 'emergency', [baby is doing something really cute but not enought light] you can pop up the onboard flash, but use something to soften the light like a white Kleenex tissue by folding it over itself once, and lay it over the open flash and then shoot.