I'm a big fan of puppy cuts! But it's also interesting to watch their hair grow, and how it changes their look.
The good news is, there is no "right" and "wrong". Check out the "My Yorkie" section of this site, and you will see every length of hair from very short to very long! You'll know what suits your dog best as she grows and changes.
A lot of it is lifestyle, too....how often you have time to brush her; how active she is outside; whether you can afford to have her groomed often, or can groom her yourself....etc.
All animals change and lose their sweet "baby" looks, however, since yorkies are such small dogs, I think they do retain so much of their puppy looks and personalities! They really are our babies for life!