I had the same questions. My girl is now 6 mo. old and sleeps w/out a swaddle. I knew she was ready to be rid of the swaddle when every time I'd check on her, she was frustrated and trying to get her hands into her mouth - almost "busting out" of the swaddle to do so. If you think she's ready, go ahead and try just swaddling her legs only. The other option is to have her sleep in a sleep sack - the ones from Halo have a "tank-top"-like top and then the sack on the bottom. That way, similar to just swaddling her legs, her legs will feel contained, yet her arms will be free. Eventually, when it got too warm, I just stopped using the sleep sack and she is fine now in just a sleeper with her legs and arm "free!"
If you do want to continue swaddling her but just need a bigger swaddle blanket, I suggest the Kiddopautamus (sp?) Swaddle Me (I got ours online at Target) in the LARGE size. Additionally, http://www.lunalullaby.com/lunalullaby/ has great larger sized, light-weight blankets that are great for swaddling as well as for summer.
Good luck and happy continued sleeping for both of you!