How To Make A Baby Sleep Through The Night?
A small infant is just like an older individual in habits, preferences, etc!!!!
It is absolutely alright for the baby to sleep without being wrapped.
In fact, this habit of completely wrapping the baby is in colder countries of the world. It is done hoping that babies will sleep for a longer time.
Rest of the world, (mostly in Asia) babies are allowed to sleep by just covering under the arm!
You are very correct in saying that you are afraid that loose sheet may come over the face and nose. In fact, the small baby pillows also can come over the face when the baby struggles.
Again swaddling is not necessary if the baby can sleep by himself. It is a blessing if your baby can sleep without fuss.
Whatever it is you keep track of your baby as you have mentioned.
Wish you all the best and happy parenting!