Very sorry to hear of the death of your friend. Still, I'm glad to hear you take comfort in God's eternal promise through his Word and Holy Baptism. Although we are right to mourn, as Christ himself mourned, we don't mourn as those who have no hope, and this is evident from your own post.
I like Isaiah 57:1-2, though its wider context is about Israel's idolatry, I think these verses could also be understood in this way: For people who are counted righteous in Christ - not with a righteousness from ourselves that comes from the law, but one that comes from Christ through faith - that who can understand when the righteous die? Who takes it to heart? It shows that God is merciful in calling his people out of the calamities of this world, and this in itself is a good and joyous thing. Not to mention the adoptionship and glory in Christ! But I know you know about these things.
I think in one sense, Lutherans talk quite freely about baptism as we have a clear understanding of it as a means of God's grace; vis., a baptism into Christ, in the name of the Father, the Son and the Holy Spirit. However, what I've learnt from talking with others who hold to Zwinglian ideas of baptism (which I used to believe too), I always feel the need to constantly remind people that baptism is apprehended through faith. I think your post is wonderfully true! - My only suggestion would be to never seize explaining that God's grace through baptism, a divine mystery, is not some work outside of faith, but it's faith in the word of God and the water. Even though this is apparent within the Lutheran understanding of baptism, unfortunately it's not always so clear to our friends in other denominations.
I know you actually explain all of this in your post, so it's not like I'm adding anything.
However, because of the many strange preconceptions about baptism out there, I always feel the need to add the word "faith" to "baptism". Just as it's written: "Whoever believes and is baptized will be saved, but whoever does not believe will be condemned."
God bless, sir.