I don't have any advice on the size or order of cutting but I have found from my experience with chenille scarves that you need to use a fairly small stitch or the threads just pull through and out after cutting. This sounds like a wonderful idea. I make baby rag quilts with 6" finished size blocks. The block are made from various fabrics like minke, satin, and flannel. I just make pinwheels, bars, or just whole squares out of scraps and sew them together. I may use some chenille on the next one.