Puffy paint on cotton sweaters works fine, so it should do just fine.
Just make sure you use a brush to make your lines flat and thin, otherwise over time the thick line of puffy paint will stiffen up, crack, and can be pulled up off of the material.
My mom used to use thick edges of puffy paint to edge all of her raw edge applique so the edges of the fused prints would not pull up over multiple washings. It worked for a time, but eventually we wound up having to pull off the puffy paint and satin stitch the edges to keep the applique from completely unfusing from the backing.
I would hate for your DGS's name to be lost because the paint pulls up after multiple washings.
Good luck!