Yes, your concerns are valid. The limited sales window and competition with books that are already perennial favorites are extra challenges in a market that's already ALWAYS tight.
Many Christmas books are about characters that have already made a splash in general, such as Olivia and Judy Moody (chapter book age). It's the beloved character that's a hook there. Also, let's face it, name illustrators and authors, especially author/illustrators, will ring more of a bell with the adults buying the books.
I definitely agree with the extra hooks advice. And if the story might by any chance make a MG novel (I don't think a chapter book will be old enough to escape the problem) or a magazine story, both of those might be easier to market.
You seem hesitant to sink time into this if the chances to sell it are slim. Frankly, in that case, I'd put my time and effort into other projects.