Plus make it extremely washable. Even if you don't want it washed at the home it may get tossed in the wash anyway accidently. And it's usually washed in hot water and dried in an industrial dryer that is way hotter then your home dryer. I worked at a nh for several years and know for a fact that things get washed that shouldn't.
Items get lost, the nicer it is the faster it finds a new home. Especially since grandmother has dementia, she won't remember that she had it or where it went. Label it really well. I like the photo idea-people will be less likely to take it if it's really personalized.
Hey, 1 yd extra isn't that much extra. Go ahead and let your mil pay for the fabric, thread and batting. Maybe once she sees how much it will costs she'll change her mind.