Wecome!
I always lose a few inches in quilting and a couple more in laundering - but I like the crinkly, old-fashioned look I get from that shrinkage.
Some people prefer a smoother look, so they pre-wash and dry the fabrics to shrink them up before they piece their quilts.
A cotton batting will shrink a little, but you can shrink some batts, too. Soak in hot water, drain, dry flat. Some batts can be dried in the dryer.
Broadcloth shrinks almost as much if it's pure cotton - poly-cotton broadcloth doesn't shrink much, it wears well and colors don't fade much in laundering.
I have no idea about the rag quilt - I've never made one.