Yes.. pillowcase; doll blanket; pillow... not knowing your grandaughter... it's possible she could create something requiring a bit more understanding. When my daughter age 7/8 wanted to learn to sew, I let her pick a pattern and we went from there. She enjoyed the process... going to the store, picking the pattern and fabric. Ended up making a wrap-around skirt (does this date us?).
Before that, I had let her use the scissors and sit to my sewing machine doing straight stitching.
When my grandaughter expressed an interest in sewing, she wanted to make pj's. We used t-shirt fabric as it's more forgiving for easing sleeves in, etc.
Whatever y'all end up making, make it fun.