The golden ratio produces a rectangle that supposedly has pleasing proportions. Personally, I don't think that there is a "perfect" rectangle any more than there is a perfect flower or type of pen or colour to paint your house; personal taste and utility for the task matter.
The golden ratio produces quilts of weird sizes. They might be great rectangles, but they aren't great quilts, because a quilt has a purpose - covering a person or a bed, that often isn't in that ratio.
It's fine to use the golden ratio to determine dimensions of visual elements within the quilt, but it's a poor guide for overall size.
Edit: Sorry, I guess that first part was just my little rant. To answer your questions:
Did I misinterpret the meaning of the 1.6 proportion? Is that not the right number? Or, do I just not have a good sense of design?
I think you interpreted it as they intended; the writer was just wrong in this application. Good design is useful as well as beautiful, so you will need to use a different ratio for your quilt.
I'm going to change it, right or wrong, as I don't like it. Not sure yet to what to change it to. But now, I'm curious about the "perfect proportion".
Good call following your instincts and changing it. Remember when there used to be "perfect proportions" for a woman's body? They really didn't work for all women, though. If we only used rectangles with the "perfect proportion", the world would be a boring place. It's definitely not wrong to make your project actually work!