It always looks worse before it gets better. Hang in there.
EDIT: OK, I posted this just after you posted about your ammonia, so I'm adding a comment here: You have got to do a big water change, or several smaller ones immediately to bring the ammonia down to 0ppm.
If your fish are used to big water changes do about a 50% change and test again. If still detectable ammonia then do another one.
If you do small water changes, do several over the next few hours to get the ammonia to 0ppm.
Have you tested for nitrite, nitrate, and ph? If the tank is fairly new then just test for nitrite and ph, in addition to ammonia, of course.
Once your ammonia is 0ppm then lets get started with the Ich treatment.
Since you have babies I think I'd go with 1 teaspoon per gallon. (slightly more than the tablespoon per 5 gallons Jeff mentioned, just in case your Ich protozoans are resistant)
So here's some information I hope will help. This is easier than you think, though it still is quite a bit of work.
You have a 16 gallon tank. When did you do your last water change?
We can do one now to get started with the salt. Here are a few pointers before you get started. You may decide to do this a different way, but I found this to be a good system that worked really well for me.
I like to use buckets for refilling, rather than a Python or other faucet-attached system; this way, at each water change, you are adding back water that is at the proper salinity each time and you are not having swings in the salinity perentage in the tank.
It is helpful to prepare the replacement water in a bucket
before you siphon out the water. This way you are able to quickly add the replacement water back in to the tank.
Getting the temperature right takes time and I don't like the fish having to sit in a partially full tank with the filter and heater off for very long while I'm mixing up fresh water with salt, dechlorinator, and trying to make sure the temperature is the same as the tank.
We want to eventually bring the tank up to 1 teaspoon per gallon, so I would take four gallons (24%) out of the tank today, using a bucket that is clearly marked so you know you have taken out that quantity. (two 5 gallon buckets with marks showing gallons would really make this easier for you)
I think I would do daily 25% water changes each day during the treatment. Let's take three days to bring the tank to full .1% salinity, which is what 1 teaspoon per gallon is.
In the replacement water today and for the next three days, mix up and carefully dissolve (stir the bejeebers out of it) about 1/3 teaspoon of plain table salt per gallon, with 4 gallons of water that is at the proper temperature, and that has the dose of Prime added to the bucket for the full 16 gallon tank, not just the 4 gallons you're putting back in.
Then, very carefully and slowly pour that into the tank. It's diluted enough you don't need to take too long, just kinda slowly pour it in.
Tomorrow you will do the same thing, and again on Tuesday.
After Tuesday, I would keep doing daily 25% water changes. This will help not only with fighting the Ich, but will help them feel generally better, and will be helpful to their immune systems, hopefully resisting the secondary bacterial infections that can often occur after an Ich infestation.
So, on Wednesday the tank is at .1% salinity and steady, and when you do your daily 25% water change, you remove 4 gallons, and this time you will dissolve 4 full level teaspoons in the replacement water. Again, temp match is important, and Prime at the full dose for the full 16 gallon tank.
This is what you will now be doing for the next 14 days.
Doing daily water changes should eliminate the problem of evaporation, but if you do see that overnight the level has gone down somewhat, then bring the water back up to the original level with temp matched, Prime dechlorinated water.
Then, once the water is at the proper, full 16 gallon level, you're ready to do the actual water change that has the salt in it.
This way you are not allowing the salinity levels to creep up to undesirable levels, as could happen when you're not factoring in significant evaporation of tank water in between water changes.
During this process you need to monitor your parameters, however, the fact that you do daily 25% water changes and use Prime will probably insure that the parameters are going to be optimum.
Feed lightly during the treatment and suction leftover food with a turkey baster, (used exclusively for aquaria, never exposed to soap, as also true for buckets or any equipment for fish keeping purposes), within 2 hours after feeding.
If you don't have the test kit you must get one asap, and a really good one is the API Liquid test kit.
You absolutely must get a good test kit to test ammonia, nitrite, nitrate, ph every day, or you will be shooting yourself in the foot. The fish must have excellent water during and after this treatment, and from now on.
Again, I really think it is easiest to treat for Ich using this bucket system.
It's not really too difficult with a small tank anyway, though it gets tedious with the big tanks.
Remember that the water needs to be the right temperature, matching the tankwater, and keep track carefully.
Also, I think it's just easier mixing the salt and water in the bucket and adding that back to the tank, as I described above.
You don't want to remove tank water in which you have the salt dosage set, and then add back unsalted water, running from the faucet, (if you are using the Python clean and fill or something similar you know what I'm talking about) and try to then dissolve and add the salt dose afterwards. You would have swings in salinity that can't be good for the fish and the dosing is more difficult, too.
I hope this helps. If anything is unclear, or you have other questions, please don't hesitate to ask.