I have to disagree! lol I respect everyone else's thoughts..mine are just different...
My thoughts are that the older fabric will be of a different weight than the newer fabrics, and that applique over the old pieces will keep the quilt from warping and stretching..you might run into big problems when you try to remove stitches, and at any rate, also...it de-stabilizes the piece right next to it, and before you know it, you'll be replace the entire quilt! My plan would be to make a piece the correct size to cove the bad part, iron under the seams, then applique it down, using very small, close stitches.
anyway..please post pics when you do this or get this finished..we all need to learn , and I would love to see it finished! Good luck!