Your mom sounds like a person who gains her strongest sense of self from doing/making stuff. She could have a touch of Asperger's (I know quite a few older folks who do, but weren't diagnosed) and simply not be aware that everybody doesn't think/feel/need in the same way she does.
Unfortunately, that leaves it up to other people to hammer out the misunderstandings that inevitably occur. You could try stating what you understand her need to be, empathizing with her, and then sharing your needs.
It might go something like this: "Mom, you've made us so many beautiful, loving gifts over the years. I know this is one way you share your love with us all, and all the time and inspiration and care really shows. We have so appreciated every single stitch and stroke. AND, this is becoming something of a crisis for us, because we need our home and surroundings to reflect our interests and tastes, too, as well as have the flexibility to change over time. So, in our new space, this is what WE ARE PLANNING (or I am planning) to do… (and then tell her what YOUR wishes are).
Your mom could become quite emotional over this conversation; if she's like mine, she may cry or scream or leave in a huff. But I've had many of these conversations over many years, and my mom gradually accepts that this is the way things are. I cannot and will not be her little girl as an adult, though it's been painful for both of us for my to assert my right to be myself (and I'm now 65). It's always been the responsibility of the child to create new space for him/herself; parents usually don't want or easily accept that change. Doesn't mean it can't or shouldn't happen.
You could be facing another "rift" here, but if you handle it gently, without rancor, your mom's feelings will heal. She's the one who will have to determine the timeline for that.