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Molly and I made this shirt last week. I am not sure what inspired this, but it was very fun.
I used Avery t-shirt trasnfer paper and printed a large enough polka dotted square that Molly's hand could fit. After printing the dots I turned the paper over and traced her hand. Cut out her hand print and ironed it to this cute Wal-mart t-shirt. I used mixed buttons to make the rest (you can buy variety button packs at Wal-mart). I sewed the buttons on, but I think fabric glue would work fine.
Try this out with your kids. I included the polka dot picture to print on the transfer paper.
When the shirt gets too small for her I think I am going to cut the front to make a pillow.