This might shed some light on the issue. From the Catholic Encyclopedia:
The notion that "Baptism is free, that is, not necessary for salvation." is considered a heresy ince the Council of Trent (Sess. VII, De Baptismo).
However,unbaptised infants probably do not go to Hell...
"The punishment of original sin is the deprivation of the vision of God; of actual sin, the eternal pains of hell." Infants, of course, can not be guilty of actual sin."
"On this subject, the 1992 Catechism of the Catholic Church states: "As regards children who have died without Baptism, the Church can only entrust them to the mercy of God, as she does in her funeral rites for them."
"IX. NECESSITY OF BAPTISM
Theologians distinguish a twofold necessity, which they call a necessity of means (medii) and a necessity of precept (præcepti), The first (medii) indicates a thing to be so necessary that, if lacking (though inculpably), salvation can not be attained, The second (præcepti) is had when a thing is indeed so necessary that it may not be omitted voluntarily without sin; yet, ignorance of the precept or inability to fulfill it, excuses one from its observance. Baptism is held to be necessary both necessitate medii and præcepti. This doctrine is rounded on the words of Christ, In John, iii, He declares: "Unless a man be born again of water and the Holy Ghost, he can not enter into the kingdom of God." Christ makes no exception to this law and it is therefore general in its application, embracing both adults and infants. It is consequently not merely a necessity of precept but also a necessity of means. This is the sense in which it has always been understood by the Church, and the Council of Trent (Sess, IV, cap, vi) teaches that justification can not be obtained, since the promulgation of the Gospel, without the washing of regeneration or the desire thereof (in voto), In the seventh session, it declares (can. v) anathema upon anyone who says that baptism is not necessary for salvation. We have rendered votum by "desire" for want of a better word. The council does not mean by votum a simple desire of receiving baptism or even a resolution to do so. It means by votum an act of perfect charity or contrition, including, at least implicitly, the will to do all things necessary for salvation and thus especially to receive baptism, The absolute necessity of this sacrament is often insisted on by the Fathers of the Church, especially when they speak of infant baptism. Thus St. Irenæus (II, xxii): "Christ came to save all who are reborn through Him to God,infants, children, and youths" (infantes et parvulos et pueros). St Augustine (III De Anima) says "If you wish to be a Catholic, do not believe, nor say, nor teach, that infants who die before baptism can obtain the remission of original sin." A still stronger passage from the same doctor (Ep, xxviii, Ad Hieron.) reads:"Whoever says that even infants are vivified in Christ when they depart this life without the participation of His Sacrament (Baptism), both opposes the Apostolic preaching and condemns the whole Church which hastens to baptize infants, because it unhesitatingly believes that otherwise they can not possibly be vivified in Christ," St, Ambrose (II De Abraham., c. xi) speaking of the necessity of baptism, says:" No one is excepted, not the infant, not the one hindered by any necessity." In the Pelagian controversy we find similarly strong pronouncements on the part of the Councils of Carthage and Milevis, and of Pope Innocent I. It is owing to the Church's belief in this necessity of baptism as a means to salvation that, as was already noted by St. Augustine, she committed the power of baptism in certain contingencies even to laymen and women. When it is said that baptism is also necessary, by the necessity of precept (praecepti), it is of course understood that this applies only to such as are capable of receiving a precept, viz. adults.
The necessity in this case is shown by the command of Christ to His Apostles (Matt., xxviii): "Go and teach all nations, baptizing them", etc. Since the Apostles are commanded to baptize, the nations are commanded to receive baptism. The necessity of baptism has been called in question by some of the Reformers or their immediate forerunners. It was denied by Wyclif, Bucer, and Zwingli. According to Calvin it is necessary for adults as a precept but not as a means. Hence he contends that the infants of believing parents are sanctified in the womb and thus freed from original sin without baptism. The Socinians teach that baptism is merely an external profession of the Christian faith and a rite which each one is free to receive or neglect. An argument against the absolute necessity of baptism has been sought in the text of Scripture: "Unless you eat the flesh of the Son of man and drink his blood, you shall not have life in you" (John 6). Here, they say, is a parallel to the text: "Unless a man be born again of water". Yet everyone admits that the Eucharist is not necessary as a means but only as a precept. The reply to this is obvious. In the first instance, Christ addresses His words in the second person to adults; in the second, He speaks in the third person and without any distinction whatever. Another favorite text is that of St. Paul (I Cor., vii): "The unbelieving husband is sanctified by the believing wife; and the unbelieving wife is sanctified by the believing husband; otherwise your children should be unclean; but now they are holy." Unfortunately for the strength of this argument, the context shows that the Apostle in this passage is not treating of regenerating or sanctifying grace at all, but answering certain questions proposed to him by the Corinthians concerning the validity of marriages between heathens and believers. The validity of such marriages is proved from the fact that children born of them are legitimate, not spurious. As far as the term "sanctified" is concerned, it can, at most, mean that the believing husband or wife may convert the unbelieving party and thus become an occasion of their sanctification. A certain statement in the funeral oration of St. Ambrose over the Emperor Valentinian II has been brought forward as a proof that the Church offered sacrifices and prayers for catechumens who died before baptism. There is not a vestige of such a custom to be found anywhere. St. Ambrose may have done so for the soul of the catechumen Valentinian, but this would be a solitary instance, and it was done apparently because he believed that the emperor had had the baptism of desire. The practice of the Church is more correctly shown in the canon (xvii) of the Second Council of Braga: "Neither the commemoration of Sacrifice [oblationis] nor the service of chanting [psallendi] is to be employed for catechumens who have died without the redemption of baptism." The arguments for a contrary usage sought in the Second Council of Aries (c. xii) and the Fourth Council of Carthage (c. Ixxix) are not to the point, for these councils speak, not of catechumens, but of penitents who had died suddenly before their expiation was completed. It is true that some Catholic writers (as Cajetan, Durandus, Biel, Gerson, Toletus, Klee) have held that infants may be saved by an act of desire on the part of their parents, which is applied to them by some external sign, such as prayer or the invocation of the Holy Trinity; but Pius V, by expunging this opinion, as expressed by Cajetan, from that author's commentary on St. Thomas, manifested his judgment that such a theory was not agreeable to the Church's belief.
XI. UNBAPTIZED INFANTS
The fate of infants who die without baptism must be briefly considered here. The Catholic teaching is uncompromising on this point, that all who depart this life without baptism, be it of water, or blood, or desire, are perpetually excluded from the vision of God. This teaching is grounded, as we have seen, on Scripture and tradition, and the decrees of the Church. Moreover, that those who die in original sin, without ever having contracted any actual sin, are deprived of the happiness of heaven is stated explicitly in the Confession of Faith of the Eastern Emperor Michael Palæologus, which had been proposed to him by Pope Clement IV in 1267, and which he accepted in the presence of Gregory X at the Second Council of Lyons in 1274. The same doctrine is found also in the Decree of Union of the Greeks, in the Bull "Lætentur Caeli" of Pope Eugene IV, in the Profession of Faith prescribed for the Greeks by Pope Gregory XIII, and in that authorized for the Orientals by Urban VIII and Benedict XIV. Many Catholic theologians have declared that infants dying without baptism are excluded from the beatific vision; but as to the exact state of these souls in the next world they are not agreed.
In speaking of souls who have failed to attain salvation, these theologians distinguish the pain of loss (paena damni), or privation of the beatific vision, and the pain of sense (paena sensus). Though these theologians have thought it certain that unbaptized infants must endure the pain of loss, they have not been similarly certain that they are subject to the pain of sense. St. Augustine (De Pecc. et Mer., I, xvi) held that they would not be exempt from the pain of sense, but at the same time he thought it would be of the mildest form. On the other hand, St. Gregory Nazianzen (Or. in S. Bapt.) expresses the belief that such infants would suffer only the pain of loss. Sfrondati (Nod. Prædest., I, i) declares that while they are certainly excluded from heaven, yet they are not deprived of natural happiness. This opinion seemed so objectionable to some French bishops that they asked the judgment of the Holy See upon the matter. Pope Innocent XI replied that he would have the opinion examined into by a commission of theologians, but no sentence seems ever to have been passed upon it. Since the twelfth century, the opinion of the majority of theologians has been that unbaptized infants are immune from all pain of sense. This was taught by St. Thomas Aquinas, Scotus, St. Bonaventure, Peter Lombard, and others, and is now the common teaching in the schools. It accords with the wording of a decree of Pope Innocent III (III Decr., xlii, 3): "The punishment of original sin is the deprivation of the vision of God; of actual sin, the eternal pains of hell." Infants, of course, can not be guilty of actual sin.
Other theologians have urged that, under the law of nature and the Mosaic dispensation, children could be saved by the act of their parents and that consequently the same should be even more easy of attainment under the law of grace, because the power of faith has not been diminished but increased. Common objections to this theory include the fact that infants are not said to be deprived of justification in the New Law through any decrease in the power of faith, but because of the promulgation by Christ of the precept of baptism which did not exist before the New Dispensation. Nor would this make the case of infants worse than it was before the Christian Church was instituted. While it works a hardship for some, it has undoubtedly improved the condition of most. Supernatural faith is now much more diffused than it was before the coming of Christ, and more infants are now saved by baptism than were justified formerly by the active faith of their parents. Moreover, baptism can more readily be applied to infants than the rite of circumcision, and by the ancient law this ceremony had to be deferred till the eighth day after birth, while baptism can be bestowed upon infants immediately after they are born, and in case of necessity even in their mother's womb. Finally it must be borne in mind that unbaptized infants, if deprived of heaven, would not be deprived unjustly. The vision of God is not something to which human beings have a natural claim. It is a free gift of the Creator who can make what conditions He chooses for imparting it or withholding it. No injustice is involved when an undue privilege is not conferred upon a person. Original sin deprived the human race of an unearned right to heaven. Through the Divine mercy this bar to the enjoyment of God is removed by baptism; but if baptism be not conferred,original sin remains, and the unregenerated soul, having no claim on heaven, is not unjustly excluded from it.
As to the question, whether in addition to freedom from the pain of sense, unbaptized infants enjoy any positive happiness in the next world, theologians are not agreed, nor is there any pronouncement of the Church on the subject, Many, following St. Thomas (De Malo, Q. v, a. 3), declare that these infants are not saddened by the loss of the beatific vision, either because they have no knowledge of it, and hence are not sensible of their privation; or because, knowing it their will is entirely conformed to God's will and they are conscious that they have missed an undue privilege through no fault of their own. In addition to this freedom from regret at the loss of heaven, these infants may also enjoy some positive happiness. St, Thomas (In II Sent., dist. XXXIII, Q. ii, a. 5) says: "Although unbaptized infants are separated from God as far as glory is concerned, yet they are not separated from Him entirely. Rather are they joined to Him by a participation of natural goods; and so they may even rejoice in Him by natural consideration and love," Again (a. 2) he says: "They will rejoice in this, that they will share largely in the divine goodness and in natural perfections." While the opinion, then, that unbaptized infants may enjoy a natural knowledge and love of God and rejoice in it, is perfectly tenable, it has not the certainty that would arise from a unanimous consent of the Fathers of the Church, or from a favorable pronouncement of ecclesiastical authority.
[Note: On this subject, the 1992 Catechism of the Catholic Church states: "As regards children who have died without Baptism, the Church can only entrust them to the mercy of God, as she does in her funeral rites for them. Indeed, the great mercy of God who desires that all men should be saved, and Jesus' tenderness toward children which caused him to say: "Let the children come to me, do not hinder them," allows us to hope that there is a way of salvation for children who have died without Baptism. All the more urgent is the Church's call not to prevent little children coming to Christ through the gift of holy Baptism."]
We may add here some brief remarks on the discipline of the Church in regard to unbaptized persons. As baptism is the door of the Church, the unbaptized are entirely without its pale. As a consequence:
Such persons, by the ordinary law of the Church, may not receive Catholic funeral rites. The reason of this regulation is given by Pope Innocent III (Decr., III, XXVIII, xii): "It has been decreed by the sacred canons that we are to have no communion with those who are dead, if we have not communicated with them while alive." According to Canon Law (CIC 1183), however, catechumens "are to be considered members of the Christian faithful" as regard funeral rites. The Plenary Council of Baltimore also decrees (No. 389) that the custom of burying the unbaptized relatives of Catholics in the family sepulchers may be tolerated. [Note: The 1983 Code of Canon Law excepts an unbaptized child of Catholic parents, if the parents had intended to have him baptized.]
A Catholic may not marry an unbaptized person without dispensation, under pain of nullity. This impediment, as far as illiceity is concerned, is derived from the natural law, because in such unions the Catholic party and the offspring of the marriage would, in most cases, be exposed to the loss of faith. The invalidity of such marriage, however, is a consequence only of positive law. For, in the beginning of Christianity, unions between the baptized and unbaptized were frequent, and they were certainly held valid. When, then, circumstances arise where the danger of perversion for the Catholic party is removed, the Church dispenses in her law of prohibition, but always requires guarantees from the non-Catholic party that there will be no interference with the spiritual rights of the partner of the union, (See IMPEDIMENTS OF MATRIMONY.)
In general, we may state that the Church claims no authority over unbaptized persons, as they are entirely without her pale. She makes laws concerning them only in so far as they hold relations with the subjects of the Church."
Whole chapter on baptism
The Meaning Of Love (Depeche Mode)