I'd choose to combine kwilter and nyleve's advice, then play up the xmass theme... by continuing the applique feathers to swirl around the corners a bit, and in the middle of each side appliquing a sprig of feathers atop of bells, then using the quilted feathers idea with perhaps a varigated red/green thread to fill the spaces surrounding the bells.
I don't think you could go wrong no matter what you decide, your adorable perceptive grandson is right... it's a winner regardless of what you do to finish it
Will be waiting to see your final results.