I've made lots of those over the years.This is the way i did it.Lay down batting,next crib panel right side up,then backing(and yes flannel is good for these),backing goes wrong side up so that the right side of the panel and the right side of the backing are against each other.Starting in the middle of one end,sew all 3 layers together leaving an opening to turn right side out.Turn right side out and sew up the opening.You can then echo stitch(about 1/4") around the picture/objects on the panel.It's easy,just sounds like a lot of steps when it's written down.Good luck and let us see it when you're done.
Kathi