The quilt is fine. It just has that old fashion look . Cotton,not matter what % it is and is mixed with poly or wool will shrink.
I never pre wash my fabric. I quilt everything,bind it and then wash in cold water,damp dry on low heat and then hand it up to finish drying. I work with a lot of flannel and do the same thing.
I alos do quilt for judging not only for myslef but others and I have never had any trouble.
Give the quilt to your MIL. She will appreciate it for the love you put in to it.