The pillow is fine - it looks like ring bearers pillows I've seen. I guess everyone has reasons that a tradition starts (and it sounds like a lot of us haven't heard of this one). But, if you are going to put something for the grandfather in the casket, I supposed to be buried with him, wouldn't a photo of each child be what a grandparent would really want? But, in any case, you did nice work!

Where I was raised, the young children/grandchildren each place a single rose, into the casket.

If the kids want one of thier own & are not really young then they can buy one themselves.
When my daddy died 3 years ago, the kids me & my brothers & sister went in together & bought the one on top of the casket.
If the grandkids wanted to place some small item in with him that was alright also. I wrote him a letter & bought a tiny army jeep called sarge from the cars movie, because his nick name was sarge & he always drove a jeep in the army.
My little nephew put a small bible in his hands .
The flowers are beautiful. maybe you could offer your services to a florist or the funeral home.

its is a pillow FROM the children to the person who has passed. I use to design them at the floral shop I worked at.
The shapes where either hearts, crosses or cirlce satin pillows. we made small arrangements similiar to a corsage and pinned them on the pillows. some people like script on the like Mother, grandma. than we sometimes put a enclosure card with the person name who sent it . Hope this explains it better

Worked in a florist for 30 years & can't tell you how many of these I have made. They were called a lid piece. All sizes ,shapes & designs. Added some color to the lid.

I've never heard of this either it is an interesting custom - I grew up in a small town and was best friends with the undertaker's children and the cemetery custodian so we were always very curious about what was going on. We were always taught to respect the deceased and not make noise, etc I learned alot back then about what happens but I've never seen the pillow before, I've seen the flowers that drape the casket but never an actual pillow with flowers.
When my grandma passed away we placed a single red rose in the casket with the great grandchildren's names attached with a piece of fabric these went in towards the end of the viewing. I love the one that you made it is very beautiful

I worked for a florist in Texas and they are a common tradition there & I live in KY where it is common here also.