I've only made one with the five inch square, but I used flannel on the inside for batting and the back side. I used a regular cotton but think the homespun would be wonderful. It ravels so nicely on it's own. The Fiskar spring scissors are a must if you have arthritis especially.
Raggy quilts work up pretty fast if you cut all your layers, then lay them in a stacks, no pinning, I didn't mark mine, I used a built in leaf stitch to decorate and sew the inside of the squares. On the smaller squares I only cut a half inch in, but I can see on the larger block using a longer cut. That makes a lot of sense.
Hope you enjoy it as much as I do. I've even made purses and baby quilts using the raggy block. Just don't cut the squares until you have them all sewn together, I tried that on one and ended up with a real mess inside and out of my sewing machine.
Sharon