As far as shrinkage goes, I always pre wash all my fabric. Shrinkage will happen there.Once almost dry, I then iron and starch my fabric before cutting. I iron blocks and pieces as I sew. I keep everything lined up and straight. Entire top is ironed and secured before I sandwich. When I quilt, I know that I will lose a bit all around, so I factor that into the border/block if not using a border. Once quilting is done, quilt is trimmed and binding is on, I wash again. I've never had any more noticeable shrinkage when washing finished quilts. Sorry, no advice on the rag quilt, as I do not make them, and am not familiar with the process.