The idea of a meandering path comes to my mind too. Starting with the town welcome sign, your grandson could walk his fingers, or drive his cars, to each of the landmarks. Your avatar could serve as an inspiration. If you were to make a quasi landscape quilt, then the background colors of the photos may merge with the background of the fabric, which would be fine, as long as you didn't loose the landmark.
As I put myself in the place of the boy, lying on such a quilt, I get drowsy with memories. (Then, again, I'm getting into the nostalgic years.) I can also picture an excited boy using the quilt to show his friends where he once lived. You have the start of a wonderful quilt, and have been fed with many great ideas. Looking forward to the end product.
Carol