Quilt #2 looks like it could have some Feed Sacks in it, not Flour Sacks. The difference is the texture. Feed Sacks are more course than Flour Sacks.
Newspaper - If they don't want the history of the newspaper, why are you worried about it. I would do as they wanted, if they want any of the newspaper remove and saved let them do that process.
I have about 60 blocks that have newspaper on the back dated from 1936. I bought them at a yard sale several years ago so they have no meaning to me. I do like to read the old newspapers. I hope to donate them some where at some point.
Good luck, I'm sure they will be please with your hand quilting.