So happy to hear it's going well. I plan to work with my 2 1/2 year-old niece (and her almost 4 year old cousin, also my niece) to make a special receiving blanket quilt for her brother who's due in February. I'll have some pre-cut shapes & the girls do okay cutting fabric with pocket scissors. I plan to give them washable glue sticks & let them attach the bits of fabric to a solid background. I may have some extra scraps of PFD fabric that I can let them "paint" with shaving cream/InkTense. My sister is great at taking photos & videos and will document it all for my brother/sister-in-law and their new bundle of joy. I'll just do some super basic straight-line quilting (straight stitch raw edge applique/quilting in one). It won't be an heirloom creation, but it will be a fun first project for everyone since the girls keep begging me to teach them to quilt.
Be sure to take lots of pictures no matter where the quilt ends up so your granddaughter will have them as a memento of her first quilting project! I really wish my mom had taken pictures of the first stitching project I did as a 6-year old (it was an orange & green butterfly). I'm sure it would mean a lot to your DGD to have a record of her earliest work.