You have been given lots of good advice about the batting. My concern is the flannel. If you decide to use the poly batting, the flannel must be shrunk first and then squared up again. Poly does not shrink and flannel does--a lot!!!
Personally, I would cut 12 1/2 inch squares of a few different fabrics and teach the kids simple piecing, including matching seams and pressing, and then go on to very simple quilting or tying.