Oh Deema - I think you are being way too critical. In the after pictures I can see where something shrunk, but it looks mostly like the binding that was effected. I would spray the quilt, both sides, with plain water. Then I would work on trying to gently ease out what you feel are the worst areas, and then I would iron the whole thing. I feel that ironing quilts/sewing projects is kind of like spackle when repairing/painting walls. It covers a lot of mistakes.
And I am sure that your Dear MIL will be thrilled with the quilt, and with the love and thought and work that went into it. Do not let your worries ruin your early Christmas celebration.