There it is: your finished pillow case dress. You could now use ribbon to cinch the neck and form the ties, but I love the look of a wider fabric tie.
To make the tie and ruffle, cut strips the width of your 54" cotton fabric: two six inch, for the ruffle, and one four inch for the tie. I cut mine with the fabric folded selvages together (just as it comes off the bolt). (You may certainly use 45" wide fabric, the ruffle just won't be as full and you will need to measure your child--use a piece of ribbon in place of the tie perhaps--and see if you need to cut an extra strip to lengthen the tie.)