So sorry for your family's loss, I know it will be very hard to bear, especially at Christmas.
I think the decoration idea is lovely, a star would be nice, or maybe an angel.
Personally I found framed photos very difficult after we lost our baby - there were lots of photos round the house of children (from the wider family) and I really struggled with that, having no one to have a photo of...but a few years later we gave a friend who lost his little boy a leather travel photo frame - and he loved it and now carries it everywhere with him.
It is so very tricky because what comforts one person will make another crumble...
Whatever you get them, your idea of saying they can open the present now or later is spot on - it means they know you are thinking of them, but also gives them space to deal with their emotions when they want/need to. There will be moments when they just want to hide from the pain, and moments when they need to disappear into it. And moments when they don't have a choice either way.
You mention seeing them around Christmas - they might want to see everyone, or they might not want to do Christmas at all, just let them do whatever they need to do.
Either way a small gift to remember their baby boy would be very thoughtful - bitter-sweet but a small comfort at a very dark time.