Can I make cotton flannel keep pleats?

[The Wizard of BC]

Cotton, buy the very nature of the fibers will not hold a crease. This is why cotton shirts need to be starched and ironed. Cotton by it's nature will also be prone to wrinkling. That is just the facts of the fibers that the fabric is woven from
.
Another fact of Cotton is that it continues to shrink through out it's life. Cotton garments get gradually smaller and smaller the more you wash them. This is why many Cotton garments get thin areas in them. As the fibers shrink we force them back to size by wearing them and the individual yarns get stretched thin.
This is also why it is so hard to make a well hanging kilt from Blue Jean Denim. It will shrink along every stitch line and develop puckers.

The good thing about Cotton is that the more you iron it the better it gets. A good dress shirt starched and ironed after every washing will look as good 20 years on as it did new.

The fusible idea to 'glue' the pleats together will work for a while but will leave a section of the pleat equal to the width of the fusible material stuck together. This will probably be visible from the outside of the kilt.

For those of us kiltmakers who work with Cotton and Cotton blend fabrics we usually do a line of edge stitching along the inside and outside pleat edges.

I have never attempted to make a kilt from Cotton Flannel and probably never will. But good luck with your project and be sure to post photos of the finished kilt so we can all learn.