I have one She's coming up for 13 now but it suited her perfectly well as a baby. There aren't many young ones around, although at one point a club she belonged to had one a year younger and one a year older, so there are pockets ... but she's never had to be Natalie <initial> at school, I consider that a win!
I know a baby Natalie. Although it's a perfectly good name, I still sometimes mentally mix up the names of the baby and her mum because I associate the name Natalie so strongly with people my own age (early thirties). I also know a baby Natalia, and have never confused her with her mum.
I'm aware this is my own odd issue though; so if you love the name, go for it.