I agree with QuiltE. If you can't see the stitches close up, no one else will see them. And, yes, with stitches so small, you are bound to destroy patches of the fabric.

I’m glad you are thinking of keeping her stitches in...what a good friend you are in helping with her UFO’s.

My vote as well!

I would not rip out stitches she had put in. The sentiment is valuable as well as the skill level displayed. And flannel looks worse when stitches are removed. I would machine stitch the rest, using a length the same as hers. It would add a remarkable talking point: “her stitches were you tight, I dare you to find where she left off and her friend’s machine continued.”

I'm another vote against removing her stitching. If her stitches aren't showing up that much, they aren't really going to clash with whatever you decide to do on the rest of it, and you could provide a label explaining that she did that part in [whatever the year was] and you lovingly made it into a quilt in the current year.

I'm inclined to do machine quilting, and if it was my project - and she didn't object - I think using the walking foot to sew around the hand-stitched area and then continuing in spirals on out to the edge would be a logical way of getting to completion while keeping the handwork as a feature in the quilt. Spirals just naturally lead the eye toward the focal point.