Vinny, sounds like a long-overdue and much-needed app that many have been waiting for. When do you think it will be available? Is there any way to find out more or get in touch with you?
I assume you've seen the above posts mentioning various products to help with "the only kink," as you put it? I think most parents with toddlers find buying an accessory to control the home button is the way to go. Or if they are one of the few who jailbreak thier iDevices, then the Incarder App is a great way to control the home button. So your app plus any home button solution sounds like a great combo.
BT, iOS restictions help a tiny bit (particularly keeping kids from deleting apps and in-app purchases), but even with all restrictions on (plus putting the device in Airplane Mode), there are still a ton of problems associated with toddlers and the home button, so restrictions aren't nearly enough of a solution. Toddlers are very drawn to pressing this one prominent button, but simply pressing the home button and exiting the intended app can be frustrating for both children and parents. And I've seen my toddler get into my contact information and calandar data with just a few random touches after pressing the home button. Restrictions don't help at all in keeping a parent's important data from being tampered with, and if the parent doesn't realize immediately that data has been tweaked, that important information that was just altered can sync to your computer, the cloud, etc.
The other problem is, being aggressive with restriction settings is a hassle. The parent has to go through all the steps to turn them all on every time they share your iDevice with your toddler, and then repeat the process every time the child is done. Since the settings don't really restrict enough anyway, I doubt many parents bother with most of the restrictions, other than the few basic ones they can just leave on most the time.