The first cut is the hardest. I cut my worn 1950s quilt handmade by my grandmother to frame for my children and me. It wasn't doing anyone any good in the closet and now we each have a piece of history. My youngest daughter remembers only being allowed to use it when she was not feeling well (after it was ragged - I used it as bed quilt for years). She says it made her feel better.
I think I would make the sweatshirt jacket out of newer fabric and do something for her with the older quilt that doesn't need to be handled so much.
BTW, Grandma was thrilled that I wore my quilt out. She did make me another that I was more careful with.