It looks like you have had a lot of suggetions already. I didn't read them all. I did see someone suggested to iron it. What about putting it back in the washer on cold water and letting it "hang dry", then iron it. I really didn't see where it looked bad, it just looks like it has been washed. The shrinking gives it an antique look. You might tell her that you washed it to give it an antique look. She is going to be proud of it even if you give it to her like it is. I think it looks great. I DEFINITELY would not take out the quilting. Just relax. (try to) LOL