Can't help much with the question of whether to swaddle or not. I am still swaddling my DD and she is 5 1/2 months old. She is sleeping through though, as long as those arms stay in.
When she was about 3 months she was getting loose from standard size swaddle cloths. I bought some flanelette and made some up 140cmx140cm. I'm just about to dso the same with muslin for summer swaddles. This was long enough width that she can't get her arms loose easily.
HTH


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! I used to leave one arm out during his day sleeps (both in at night) until he eventually could sleep un-swaddled.
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