"It also means that tiny babies get less time being held by their parents, which I imagine is not good for their development."
Tiny babies should NOT be held by parents when the car is in motion, period. Good way to crush them if you have a wreck.
My husband witnessed an accident in which the mother had been lovingly holding her baby in the passenger seat (before the days of seat belts.) The mother died, asking where her baby was. She was spared the sight of him in the glove box, but my husband wasn't.