Do you really think that Bush directly oversees the details of the arrangments for the State of the Union Address? I would think it's the staffers of the Congress that deal with it, considering that Bush has a lot more important things to worry about as to whether or not a Congressman brings his daughter.
With an election coming up and the SOTU being a prime time nationally televised appearance, yes I do think that Bush would be apprised of such a detail. Rules were broken and security measures were altered to allow this child to be there.......and Bush was placed in the national spotlight hugging and kissing the grandchild of a nationally known political opponent. I don't think that something like that would have been sprung on the president unexpectedly.