Yep, it's still stiff, and washing will not soften it, and it will probably bunch up when laundered. You will want to use a poly batting that's not going to shrink at all, and pre wash your fabric.
If your hoop is big enough, and your machine or embroidery software has the ability, you might want to look at enlarging the design WITHOUT increasing the number of stitches. There often are 2 options, one that makes the design bigger and adds stitches so the density is the same as the original, and one that uses the same number of stitches, but enlarges the design, thus making it less dense. You usually can increase the design by up to 20%. if you do this, you obviously need to stitch out a sample design.
When I got my first embroidery machine 20+ years ago, the instructor in the first class I took told us that the most important thing to learn is use appropriate fabric with your chosen design (and vice versa). In other words, a sturdy fabric can support a dense bullet proof design, while a lighter weight fabric is better served with a sheer design. Yes, you can add stabilizer, but the fabric isn't going to drape/lay nicely.
Whatever you decide, be sure and stitch out a sample, then launder it to make sure you are going to be happy.