New idea. Suggest that SHE - the friend, NOT YOU, quilt the necessary amount of embroidered blocks it would need to enlarge the quilt, which would add her loving handwork to the quilt she wants her daughter to have, and when she is done, you can get together and disassembled the boarders, go to the fabric store, TOGETHER, pick out the new fabrics, and TOGETHER, you can lovingly refinish the quilt. Ah...the joys the daughter will have with all those generations of loving handwork everytime she looks at the quilt with work done by her grandmother, her mother, and mostly you.
Now removing tongue partially from cheek. Seriously, suggesting that your friend add her hard work may be just what is needed, and done gently in this way, showing her how much more her daughter could appreciate the quilt, may give you another couple decades to have to decide.