Answer:
In the Catholic Church it is considered a human soul and it is baptized and given a name. The tiny body is given a funeral and buried in a suitably sized casket. I would assume, it is dressed. The Mass involved is called the Mass of the Angels- reserved for such things as stillborns and children who die under Communion age. There are some burial niches in the Holy Name Mausoleum clearly marked ( Holy Innocents) intended for departed babies.