Your toys are really cute, Mary! And welcome to Etsy. We've had a shop there selling wooden toys for almost two years now, and we've had a great time with it. (Our shop is called TheWoodGarden in case you want to check it out.) I see you've already made 3 sales--looks like you're off to a good start!
Etsy is a wonderful place to connect with customers all over the world who are interested in buying quality handmade things. You're right, most people still buy the Chinese junk, but there are also plenty of people out there who don't want to do that.
It doesn't look to me like you need much advice--the only thing I can think of is that it would be a good idea to fill in your shop's policies page, with stuff like your policies on returns, shipping times, etc. It just looks more professional.
Good luck with your shop!