Bearis--thank you so much for these great suggestions. I like them both almost equally. I did find a Moda Bella (love those color cards) called Indigo for the binding--a perfect cross between the faded-to-gray navy blues and lighter grays, once darker, of the rectangles in the quilt--that could work nicely.
I like the idea of remaining 'true' to the original quilt and your suggestion to refold or underfold the edges to an half-inch. The 0.25" edges are quite bulky because of the wadding used and because it comes up to the edges on both front and back sides of the quilt. It does seem to be a old-timey Stearns & Foster Mountain Mist type 'wadding' that is quite heavy. Because of that bulk, I think I will have to underfold the edges to a half-inch whether I self edge or add a double binding from 3 inch binding strips. I guess it will all depend on how it looks and feels after the underfold and seaming of front and back edges together. I am giving myself permission to use my sewing machine to do that--possibly top-stitching a double quarter-inch seam. ;->) I can always revisit using 3 " binding later.
Again, thank you so much for your interest and suggestions.