The reason why you wouldn't use flannel is because it wears faster than regular cotton. You can use flannel. For little children's quilts, it doesn't matter. It's not a lot of fabric and they aren't going to keep the quilt more than 8 years. I wouldn't do a lot of fancy quilting on it, but it looks great. If you want it as a keeper quilt, make a larger quilt, then tie the quilt instead of quilting it. That way, when the flannel wears out, you can cut the ties, cut the binding (or unsew it - use big stitches) and replace it.
I have no problem with quilting a kids' quilt with flannel on the back. I use it to practice new quilting styles. Few blankets are kept 'forever'.
I have quilted several adult quilts with flannel on the back. I don't use small, fancy designs. They are large meanders or patterns.