we have 3 indoor cats, and will have a new baby in September.
I don't foresee a problem. the main issue with cat hair is on the sofa, but we just vacuum it. Unless the baby is allergic, I don't think the hair will bother them.
The only thing I'm concerned about are the cats lying on the baby's face when they're sleeping, but I think it's unlikely as they tend to sleep on the end of the bed or the sofa.
I agree about extending their space though, as I've found our cats don't like our son much as he's loud and he chases them sometimes (we got them when he was under 2, but not a baby). We have recently catproofed our double garage, so they can go under there for refuge. I'm also thinking of cat netting the veranda, although it might look ugly, so maybe not. A cat run is a great idea as well.