construct:
Lay the two sheets, one on top of the other,
with their right sides facing each other,
on a flat surface (probably the floor).
Lay out a layer of batting
that slightly extends beyond the flannel sheet edges
on top of the sheets.  Don't worry if the batting must be in pieces but, for ease of construction, try to keep the pieces big.
Using the regular needle and the thread that shows up well against your fabric,
sew big stitches all the way around the two long edges and one  short edge.  Make sure you are getting through all the layers.
For extra durability, sew the loose batting edges, if there are any, to the closest sheet ONLY,
with the same thread and stitches.
(This will prevent the batting from slipping around and bunching up while you are making the blanket.)
Make sure that your stitches will hold the pile together when you pick it up carefully.

machine sewing:
If you've never used a machine before, or if the machine is entirely unfamiliar to you, play with some scraps of fabric until you feel comfortable sewing a straight line both forward and backwards.
Starting at one corner, with the sheet-side facing down and the batting facing up, begin to sew along the edge.
Make this seam approximately 1/2 inch in from the edge of the sheets.
Every so often, sew backwards and then forwards over the same line.  This creates a stronger seam.  When you start or stop stitching do the same thing.  Don't worry about sewing over the hand stitching you've already done.
If you don't know how to turn corners, don't worry.  Just take the pile out of the machine, turn it and start again.
DON'T SEW ONE SHORT END SHUT.

finishing:
Now the fun part.  Lay the pile back on the floor.  Check to make sure all the edges are sewn together firmly.
You can use hand stitching to catch any piece that you missed or to straighten out a place where you accidentally swerved.
You should have a fairly straight and sturdy line of stitches running around three edges.  You can now snip the basting stitches and pull them out.  (Leave in any in the center where you sewed down loose batting.)
Turn the whole thing inside out.  You will have batting in the middle and sheets on either side.  On one sheet, you should be able to see the hand basting you did if you needed to.
The last boring part of the process is to sew the last short edge shut.
Fold the loose edges of the sheets inward, making sure the batting gets folded into one of them.  Pin or baste these folded edges together, making sure they meet evenly and creating a straight edge.
Either take it back to the machine and sew very close to the edge or whipstitch it closed by hand.

Whipstitching:
Using matching thread,
(and inserting the needle first from between the layers to hide the knot,)
sew through all layers up from the bottom, around the edge, and up from the bottom again.  These stitches need to very close together and about 1/4 inch long.

Decorating:
You now have a pretty serviceable blanket but you can and should use the yarn to tie all the layers together.  This is a cuddle blanket so its going to be abused and laundered repeatedly. In pattern or using random placement, sew through all layers with short pieces of yarn, tying each length just like grandma's old quilt.
Remove all basting stitches.