I was paid one time to use the deceased father's various shirts to make a wall hanging for each of the two girls when they graduated High school. That way they would have something to remind them of their father. The shirts had memories tied to them, so the blocks had memories tied to them.

Using each shirt and white I made two very basic nine-patch blocks for each WH. The first shirt's block became the first in the first row, the same blocks set in reverse order was the bottom half of the WH. Then I just kept working my way inwards until the two sets met in the middle. The backing material was something the mother picked out for each girl, something in her style. That way the WH was a combination of Father's and daughter's style.

Or you could pick something the woman was known for or crazy about and use the material to make pillows in the shape of whatever it was. ie: Tennis racket shaped pillows, or pillows shaped like frogs, or....

Dress a Doll in a mumu made from the material. or an apron (normal or doll sized) from the material.

I seriously doubt that boys would want something big in a flowered print in their rooms, even if it was a reminder of their grandmother.

How about a fabric covered picture frame to hold grandma's picture.
or-- A small album covered in the fabric where they could store pictures of them and their grandmother or just of them.
or-- A fabric covered binder that holds manilla envelopes where they can store monentos or report cards or anything really.
or--A fabric covered wooden box from a craft or dollar store--same idea as the binder.

If there were some plainer ones you might do a board to hold photos and things. Cover a piece of heavy cardboard or masonite--masonite is best. Then staple black elastic diagonally both ways over the board spacing them about 4to 6 inches apart. Photos and papers can be stuck under the elastic.

Just a few ideas that I can think of right now. I hope it helps

I don't understand why pillows wouldn't be desirable? IMPO, they'd be the perfect item, since you can hug & snuggle into one - just like hugging Grandma.

Or you could make stuffed animal/shapes as suggested above, to serve the same purpose...

Thanks for all the great suggestions.

Google "fabric bird mobile". I'm getting ready to make some of these for my niece and nephew from shirts that were worn by their beloved grandfather.

Just a thought, once I made patchwork very small christmas stockings out of 'special' fabric for a lady.( it was from some of her parents clothing) She hangs them on her tree every year now to remember her parents.