What lovely ideas offered here! My family went through a similar tragedy. Some of my sister's memorable items were made into teddy bears for her grandchildren with details embroidered on the bottom of the feet. The teddy bears get less wear and tear than a blanket would but check with your BIL before changing his plans. Whatever you make will be treasured, I'm sure.
These are excellent suggestion that Chris has made. I am having a hard time judging the condition of the fabric, but you seem to be quite concerned that it will deteriorate more, so I would suggest that you make it a wall hanging to be looked at instead of a quilt to be used. Both could be loved and it would take the stress off of the delicate fabric not to have to launder it repeatedly.
Hi Haleymax, I've had a look at the pictures, but they are still very small even when you double click on them to make them bigger. What I'd suggest is put your stabiliser on the back of the cotton fabric and you can also add some pellon or soft interfacing such as Vilene. If you want to place another piece of fabric on top you would need something that is see through so I'd suggest something like an Organza or some sort of Chiffon - you'd need to watch out for the washing/laundry options on these though. Being on cotton it offers a few challenges. Talk it over with your local fabric store and get their suggestions too. I'm sure other ladies on here will come up with something else as well. Also putting on embroidery designs will make the 'quilt' more stabilised and keep it all sandwiched together. I hope you get lots of helpful suggestions. Love and blessings Chris, Newcastle, Australia.