If it's cold where you are at, put batting in. If it's a warm climate, I would use flannel as batting. I've made quilts both ways and the one with batting in it is very warm. The ones with flannel are thinner and very cuddly.
I would not tie a flannel quilt. If it is going to be washed a lot, there would be a lot of fraying. If you have a serger, I would suggest piecing with it. If not, when you quilt it, I would use a double sided blanket stitch on all the seams to hold them down. These special children might not have someone who could repair the quilts for them.
Also, I don't like to do binding on a flannel quilt. I like making the backing extra large and bringing it to the top of the quilt and hemming it down with a sewing machine instead of hand sewing. Again - for durability.
It's a wonderful thing you are doing.