My 2-year-old actually did better in the movie than my 6 year old. I don't know how everyone else got such a different impression, but I thought that the climax of the movie was way too scary. One thing building upon another -- they're safe! No, another terribly dangerous thing is going to happen! My DS1 shrieked, "They're not going to make it!!!" and he shook and whimpered until the conflict resolved.
DS2 kind of lost interest at that point, thankfully. My husband took him for a walk up the aisle.
As for "Baby broke his heart", there's a big baby doll with a bum blinky eye who lives at the daycare. He has a heart necklace that says something like "I belong to Daisy" -- his original owner -- Lotso Huggin bear rips it off his neck when it seems that Daisy doesn't want them anymore and they go to live at the Daycare. Maybe another explanation of what your DD meant? It was a pretty sad scene, the toys are standing out in the rain and the doll says "mama".