I've used almost all types of cotton fabrics, regular cotton, flannel, and my favorite is homespun or brushed cotton. I like the homespuns because they are the same color on both sides so when the quilt "rags" you don't see much if any of the white underside. Most of the time I use a 3/4 to 1 inch seam.
As to washing - well many- laundromats have signs saying NO to rag quilts. I wash mine at home. When drying I check the filter about every 5-10 minutes to clean it during the drying process.
My adult kids love the raggies they seem to be their favorite.