Do babies and young children who don't understand and are unable to grasp 'faith' go to heaven?
What about stillborn or aborted babies?
Heaven or hell?
In simplest terms, we don't know and can't say.
The traditional and historic Christian view:
A baptized child is a Christian, and therefore the promises of God which He has attached to Baptism apply just as much to a baptized infant as a baptized adult since there is no difference--baptism is baptism.
It isn't the Church's business to say who is and isn't saved, we can only speak affirmatively in regard to what God Himself has said and promised; beyond that we can't say because we don't know.
It's important here that when I say we can't say because we don't know, that this isn't said in a callous way. As though we don't know and thus we don't care. It's not about apathy, it's about not allowing us to engage in wild speculation, or to presume to speak for God when we have no right to do so. Because we should very much care, we should very much be a people of hope. And I think that hope, the hope of the Church, is that yes--infants, young children, those who died stillborn, etc--will have their place with God in the Age to Come. Even as it is the hope of the Church down through history that all will be saved. That damnation is not something God does to "those people", but rather damnation is something we do to ourselves.
It is my prayer and hope that, when all is said and done, hell is empty and all are at Christ's side in the end. But, I can't know that, I can't know one way or the other what will be.
-CryptoLutheran