for cotton i use a 1/2" seam and clip really close. the more layers you have the better it will turn out, if you only have a top and bottom layer there just isn't enough fabric to (fluff) at least a 3rd layer is needed, usually flannel works the best.
when i want to test to see if my fabric choices are going to 'fray' the way i want i make a practice piece, usually about 4 blocks sewn together, as they would be in the quilt and i make it start to finish and see if it is what i want...if it is great! i get going on the quilt (and i use the practice piece to make a pillow to go with it. if it does not then i can add another layer, or start over or adjust as needed to get the finish i am looking for. it's all trial and error ;)