Background Breastfeeding is recognized as a crucial determinant of child health and development, yet its multifaceted effects remain underexplored in many contexts. This cross-sectional study investigates the association between breastfeeding practices and various health and developmental outcomes in infants and young children, focusing on exclusive breastfeeding, partial breastfeeding, and formula feeding. Done at Khyber Teaching Hospital, Pakistan, the research aims to provide comprehensive insights into the nuanced impacts of breastfeeding on child well-being. Objectives This study aims to assess the association between breastfeeding duration and practices with the incidence of infectious diseases in infants and young children. It investigates the relationship between different breastfeeding practices: exclusive breastfeeding, partial breastfeeding, and formula feeding and cognitive development outcomes in early childhood. Additionally, the study evaluates the role of breastfeeding in the development of motor skills in infants and young children. Methodology A cohort of 390 participants, aged one month to three years, participated in the study. Data collection encompassed parental interviews, clinical assessments using standardized tools such as the Bayley Scales of Infant Development, and reviews of medical records. Statistical analyses, including frequency analysis and chi-square tests, were conducted to elucidate the relationships between breastfeeding practices and health outcomes. Results Exclusive breastfeeding exhibited a significantly lower incidence of infectious diseases compared to partial breastfeeding and formula feeding. Specifically, among exclusively breastfed children, incidences of colds, pneumonia, and diarrhea were 32%, 39.7%, and 40%, respectively. These rates were notably higher in partially breastfed and formula-fed children. Cognitive development outcomes also varied significantly across feeding groups. Exclusively breastfed children demonstrated superior cognitive performance, with 34.2% rated above average, compared to only 6.5% in the formula-fed group. Additionally, the prevalence of developmental delays was lowest among exclusively breastfed children (14.1%), contrasting with 62.8% in the partial breastfeeding group and 77.0% in the formula-feeding group. Conclusions The study underscores the pivotal role of exclusive breastfeeding in promoting optimal child health and development. Exclusive breastfeeding is associated with significantly reduced incidences of infectious diseases, superior cognitive development outcomes, and a lower prevalence of developmental delays. These findings highlight the importance of supportive interventions and policies aimed at encouraging exclusive breastfeeding practices, ultimately enhancing child well-being and developmental trajectories.