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I like Iris and would use it. Body part, indeed! It's not as if you were naming her Toe or Earlobe. Iris is almost my favourite flower name, just shaded into second place by Daisy, which I have personal reasons for loving.

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Iris Arabella is fine, and matchy initials could be a nice link between the siblings, but they can also be a nuisance, especially for banks and government institutions. Perhaps an extra mn might help - Iris Arabella Jane, Iris Arabella Lucy ...