I found some Cuddle Duds flannel sheets on clearance at Kohls and am gonna try them as backing. I washed and dried one set and it came out of the wash, very soft, fluffy and cuddly. I think if you can find some "higher end" flannel sheets, they might hold up better and not do all that pilling and wearing. Not to mention they come in bed sizes so may not have to piece the back.
Just an idea for you.