To deal with the cracking and peeling, start by re-ironing the decals like you would if you were applying them; that'll melt any remaining glue and get it sticking again. Then you can fill in any big gaps or missing letters with new decal material or fabric paint, markers. etc. To freshen them up, you'll want to use paint that specifically says it sticks to plastic/vinyl. The stuff they make for car interiors is best, but I think it only comes in big spray cans.
All that being said, those decals just aren't made to hold up to regular use. If the plan is for this quilt to be used and washed, then you should probably be upfront that you're just buying time and make a plan for what happens when the peeling returns. Personally, I'd outline the letters and logos with embroidery or quilting so if anything does come off later on, there's not a big mystery gap.