All of the above. I am making one now that has only a 5.5x4.5 logo on left front of shirt. I am cutting up the rest of the tees to use as fabric and making a log cabin kinda design. I have not ever oriented the tees every which way, but had a young student who did It was awesome. She also cut up the rest of her tees and used as sashing or to make a smaller design to fit a space.
I have also used flannel and regular quilting cottons with much success. Any leftover blocks, I have used as part of the backing. Yes they are very heavy with or without batting. I have used flannel on back, but this quilt is getting fleece on the back and no batting.
Good luck. Enjoy the oohs and ahhs you will be receiving.
Pegeth