Funny this post popped up.... i made a flannel twin sized quilt for my niece 12 years ago...it is now a square only about 18 x 18 inches. But it has been washed about 10,000 times. Lucky - or crazy, depending on what you think of my stash habits - i still had about 2 total yards of the various flannels - and just made her another one - lap sized....she doesn't know....but i think she'll be happy.....she's 18 now, but still sleeps with the 18x18 piece under her pillow at night !!!!! (don't tell her i told you that)
So...short answer....go for it - but yes - 1/2" - 5/8" seam allowance.