I agree it's simple fear and adjustment. Do provide a little cover to the cage. Do read or sing to the baby. As he relaxes offer treats through the cage. Just let him adjust to the HUGE change in his life.
Cages next to a traffic pattern can be very hard for a bird, especially a baby to adjust to. Quieter corners work better until they've learned they're safe. Places where they can see someone most of the day tend to make them happy. They are flock animals.
If he was tame like that before, he'll come back to it. He just needs time to adjust and feel safe. Talk, sing, offer treats and be patient. Even abused birds come around to a consistent safe pattern of interaction.
Though cockatiels are small parrots, you can often get better results by giving them predictable verbal cues. Show a treat. Ask the bird if it "wants the cookie", offer the treat toward the bird.
If the bird BACKS OFF, take the treat away, and say "okay, don't want it." Predictable behavior on your part, and respect for the bird's opinion generates trust quickly.
Teach your daughter the same pattern for touch. We say "pet the bird?" And only then offer a hand. Birds that want petting STEP to the hand. A bird not interested in PHYSICAL interaction at that point for any reason - steps away. We still say, okay, don't pet the bird - then talk to them, sing to them, or offer treats.
Respect for what they WANT and NEED earns trust. A bird might want to be sung to over being handled right then. They are intelligent, they do have actual feelings. They can and do learn the context of words.
All parrots are wild animals, hand fed or not, and as such respect for their nature, their intelligence and their capacity for likes, dislikes and preferences in handling actually help in all aspects of living with them.
Routines and patterns reassure them. Just as it does small children. Unlike chickens they are wild and even small ones can bite quite hard, respecting their nature goes a long way toward a smooth path. They bond, they love, many laugh and speak, all are capable of fear and joy, and grief. It's why we're attracted to them and them to us.
Luck with him, I love them.