First if you didn't hear it from your daughter and it was from another source I would first talk to your daughter about it.
If she does feel that way explain to her how it makes you feel when you are working on the quilt and the self satisfaction that you get from quilting. Even if you never give another one away....and even if after you are gone no one will want them. Explain how much you love the entire process. From picking the pattern, fabric, cutting and stitching.
Everyone has something that makes them feel good. If you stop doing something that you love...especially if you feel that you are being forced to do it, you will become resentful and most likely become depressed.
I don't like talking about death but it is part of life...people might not care about the quilts now....but after you are gone may be a different story.
You are not out drinking, you are not doing drugs, you aren't spending money foolishly on clothing that sits in your closet with the tags still attached. You are appeasing your creative passion.
I don't know if you are married as you didn't say but, if it is not causing any problems in your relationship and you are happy, who is to judge what you do for a hobby. Your daughter and everyone else is entitled to their opinion but they are not entitled to make you feel guilty for something you love.
Since you and your daughter are such good friends it sounds like there would not be a problem talking to her and letting her know that you value her opinion but, you are going to continue quilting. You love each other and I am sure that she will understand that you don't want to discuss it again.
Don't give up your passion..and don't feel guilty for doing it. Life is to darn short.