I left the collar untouched. The length was also perfect for my baby's length, so bottom was finished as well. I laid a pair of my son's pajamas over the sweater (centered over the zipper and collar) to get an idea of the width, inseam, and armhole size. The white lines below show the places I cut into the sweater.
I pinned it to the crotch of the back piece, right sides together, and stitched it about halfway around. (Note: on all seams, I sewed a straight stitch first, then used a zigzag stitch over top to keep edges from unraveling and to make the seams stronger.)
This is what the back looks like once the circle is sewn on.
Next, sew the side seams, right sides together, up to the armholes.
Measure the circumferences of the armholes. Cut two strips this length, and about 1 1/2 inches wide.
Fold the strip in half, right sides together, and stitch the short ends together. You will use this as a binding for the armholes. Pin this, right sides together, to the armhole.
Sew the binding to the armhole. Turn the jumpsuit inside out, turn under the edge of the binding, and pin it to the inside of the armhole.
Whip stitch the turned under edge to the inside of the armhole.
The embroidery on the back was such fun. And, in fact, quite leisurely. I just freehanded it (the little knits all throughout the garment were kind of like grid lines to keep my lines more or less straight). This was my inspiration.