Blue Splotchy Thingy

That "blue splotchy thing" is called "lens flare." The sunlight was coming in from camera-left and it was shining onto your lens, although it's not in the photo - that causes reflection and refraction of the light through your lens and onto your sensor and you get "flare." What camera are you using?

Usually when you get "flare" you get a contrasty or washed out image - this one looks pretty salvageable except for that corner. You may want to try:

- cropping tighter, cropping the flare out.

- in PS use the burn tool over that area set to midtones.

- isolate the area and play with levels.

Good luck! It is a cute shot!

 

Also, when you take the picture and you see this on the LCD screen or thru the viewfinder, just hold your hand up next to the camera and try to block the part of light that is shining to produce this effect. DSLRs/SLRs can use a "lens shade" to combat this problem while with point/shoot cameras, you either have to do as I mentioned above or reposition yourself so you won't get that flare on the side.