S.H.
I would just take the things and say "thank you." If it is something particularly sentimental to her, dress baby up in it when you visit her. Put all the rest of it in a box, and if she comes over you can pull a thing or two out. If she comes over and it's not out, say you're having it cleaned or you're rotating things b/c you've received so many generous gifts. Then everyone is happy, right?
I think you could just be gracious, it's not a terrible problem to have.