Hi! My very first quilt was made with wool yardage that I bought from a Hancock's where my Mom was working. I cut the yardage into squares and sewed them together. I didn't know that I should use batting. I backed it with corduroy. It is a little bit smaller than lap size and that baby is heavy. I made it for my Dad who was ill and cold all the time (despite living in Southern California). I used the envelope method to finish it, so I didn't do a binding. Needless to say I've made a lot of improvements in my technique since that first one! My Dad loved, it though, so that is what counts. Here is my advice, having been where you are.
1. I would go with the 8 inch square size.
2. Try to keep as consistent a 1/4" seam allowance as you can. If you go too large the seams can get very bulky.
3. If you can, I would use a wool batting as they are pretty light but warm. You'll want to keep the weight down if you can. This is important for the receipient as well as for you working with it.
4. I would back with flannel (just make sure that it is prewashed a few times to make sure it is fully shrunken). That would make the quilt super warm and cuddly. Pin really well because even though the flannel is not slippery and will grip the batting (if you choose to use it) or the top (if you don't use batting) the weight of the top will cause some slipping. Especially if you don't have a table to big enough accomodate the entire quilt when you baste it.
5. Tying would be fine and it would give it a nice rustic look. You can just use perle cotton and it won't affect the washing. I would not make them too long and they will wash just fine.
Good luck and we look forward to seeing your quilt. I love working with wool and I know that your Dad will love it. Ask as many questions as you need. I love seeing everyone's questions and I always learn something new!