Ok, my non-legal counsel out the wazoo just woke up opinion is that this from an origin of species perspective, this falls within a category that could be called personal journalism and therefor should fall under fair use. Shared vacation snapshots nearly always have some sort of protected trademarked copy written materials appearing incidentally or even on purpose and it would be onerous to legally require them to be free of such attributes before they could be shared publicly. The Washington post should not have to blur the label on the can if they have a picture of a candidate drinking a beer and MSNBC shouldn't have to buy usage rights if they do a live report from a political convention during a portion of the show that happens to have a well known pop song playing between speeches. I know that in todays media Astroturf flavored mishmash, it is harder and harder to determine what is and is not commercial use, but YouTube is the only one, besides Universal, who is going to benefit commercially from this sort of user generated media. If it were promoting baby dancing shoes, that would be a different story. This lady is essentially reporting on family events for all interested and this event happens to be baby dances to a portion of a classic song. I feel that video shot of a dance performance is also journalistic fair use, but I would certainly defer to a stronger legal opinion on that matter.
Some of my opinion also rests on the structure of the presentation and the intent of the creation. For example, if the video started at the beginning of the song and ended at the end of the song, rather than just occurring during a portion of the song, then the video is in some respects more about the song than the event, structurally. If a teenager films herself in her bedroom showing off her ass shaking skillz while she plays a hot new track, that is more of an infringement of the songwriters work than if say some creep standing outside her window films her filming herself shaking her ass while the track plays, even if what he's doing is more criminal in other respects.

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