If i hand sewed a quilt binding, I would not be able to use my hands for days without pain. Heck, sometimes piecing is hard on them. I always machine stitch. I sew the binding on the front, flip it over, then use a decorative stitch on the front (usually a feather stitch). I have been using a 2 1/2" binding but there is always some extra on the back when I use warm and natural batting (pretty thin). My next quilt will use 2 1/4", and I think that will work well.
Pam