I think I'm gong to go with Option B on the blanket - thanks for all the suggestions last week. I still haven't quite decided on a backing, but my heart is leaning towards some soft flanel in a soft, moss green. I have this image of me stumbling across the "perfect" blanket at a fleamarket and it turning out beautifully. We'll see.
Funnily enough just after I posted about my blanket I was doing a bit of Anthropologie stalking and found these amazing blankets made from upcycled cardigans and jumpers. For a brief moment I contemplated making something like this as the backing until I realised that that would be 100 times more work than just sewing my 12 squares together in the first place. Plus I don't own a sewing machine so sewing anything is a challenge requiring many hours of hand-sewing or some investigation about where I can "hire" a sewing-machine from.
Sometimes I wish I had a Doppelganger who knew how to do everything that I thought of. And then I would say "Doppelganger, find the perfect backing for my knitted squares and while you're out, you could pick up a few cardigans and make a second blanket just like this one". And then I would go do something else and a couple of days later they'd be finished and I'd have all the happy feelings that you get from completing a project, without the stress and torment of it not working out. Silly thoughts for a Thursday morning.
Blankets available at Anthropologie