I would give her the name and phone number of the LQS and tell her they might be able to help her find someone who does hand quilting -- or possibly they have a hand quilting class that she could take so she could make the quilt. I don't make things that I'm not interested in or use fabric that I don't like -- it's just too much of a chore instead of fun. You've said no. If it was my MIL I'd gently but firmly tell her I don't do that type of quilting if she asked about the progress I was making. Good luck!