So I decided to edit the picture in Photoshop to blur the background. I was surprised how easy this was, just took a bit of patience.
Here is the picture I started with.
1: Create a Duplicate Layer: right click on the current layer and select Duplicate Layer - I named this one "Blur Background"
2: Then select Filter, Blur, Gaussian Blur
3: You'll want to play with the Radius a bit. For this picture, I went with 25.3.
4: Then select the Erase tool, located in the Left panel. You'll need to adjust the brush size a bit too (located in the upper left). As you get closer to the edges you'll want to enlarge the image and reduce the brush size.
Tip: One thing I also found helpful was clicking the eye button next to the layer, this turns the layer on and off so I can see where the edges are or the hair that I wanted to keep.
On this photograph, I also used one of my favorite actions by Pioneer Woman: "Bring On The Eyes" in Pioneer Woman's Photoshop Actions - Set 2
After - What was originally a goof off picture, turned into something that really captures my daughter - she is silly, pretty and fun :)
I hope you give it a try and feel free to pin it for future reference!