Poor flannel gets such a bad rap, it's too bad - it is one of my favorite fabrics - and it'd be super absorbent in a flat.
The flats I have are 36" x 36" and they are great for toddlers, more absorbent than prefolds I have!
Here's how I fold them:
www.diapershop.com/howto.htm
I'd make them just one layer, two layers would get pretty thick. Def. serge the edges or fold them under and hem them with a regular machine
