An update! We did give Grandma "her" quilt and she was delighted with it. It made me feel good to look around at the institutional feel of the hospital only to see a bright, cheerful quilt on her bed.
The "plan" was to move her to a convalescent hospital but there were no spaces available. We were told it could be months before a space opened up! Until that time, she will stay in the hospital.
Most recently, my FIL seeing how unhappy she is in the hospital talked to the doctor about bringing her "home" with some daily care.(He is 90 and not in the best health, either.....) We are delighted and are waiting on pins and needles for all of the details to get worked out. Bringing her home to her own house is the best Christmas present I can think of........