You have hit on my favorite theory. Unwed Mothers home in Seattle area used a Canadian hospital for their deliveries.
I read those facts long ago and still feel a “tingle” about them...Most other scenarios don’t do that to me.
Actual father?
It’s a possibility that Stanley Ann gave birth in Vancouver, HOWEVER, having lived in Washington State, I can tell you that no one needed a US Passport to travel back and forth into Canada in those days.
I would be curious to know why she got one in 1960 - certainly not to move from Seattle to Hawaii in summer 1960. It was already a state....of course, her files were “accidentally destroyed” a few years back so we may never get a clear answer on exactly when she applied for her first passport.
My mom is from the Pacific Northwest and has been saying this for the past five years.