Is then the external baptism with water the washing away of sin itself?
Not at all, for the blood of Jesus Christ only and the Holy Spirit cleanse us from all sin.
Scripture references
Why then does the Holy Spirit call baptism the washing of regeneration and the washing away of sins?
God speaks thus for good reason, namely, not only thereby to teach us that as the filth of the body is purged away by water, so our sins are removed by the blood and Spirit of Jesus Christ, but especially that by this divine pledge and sign He may assure us that we are spiritually cleansed from our sins as really as we are externally washed with water.
Are infants also to be baptised?
Yes, for since they, as well as adults, are included in the covenant and church of God, and since redemption from sin by the blood of Christ and the Holy Spirit, the author of faith, is promised to them no less than to adults, they must therefore by baptism, as a sign of the covenant, be also admitted into the Christian church and be distinguished from the children of unbelievers, as was done in the old covenant by circumcision, instead of which baptism is instituted in the new covenant.