I tried my hardest with the clone tool and even some layer masking for the black clothes. It's not the best it could possibly be, but I am content with it... I'm sure my mother will be content with it too.
What I did:
Basically, I just made a pattern in the backdrop. It is indistinguishable what it is in the first place (besides having a tree there), so the clone brush was really my friend here.
As for the black area next to the boy, I tried to make it look like a continuation of G-Ma's dress. As for wherer his arm is? Well... Come up with your own conclusions! If it was hidden in the original pic, it's hidden here. It must be behind his back or "under the dress."
I also turned the photo to black and white using a new Color Layer and filling it in black. Then in Picasa I tuned it back to Sepia and boosted the contrast that was lost.
Thanks again for all your help and support. I need to get my hands on some other photos soon (and a better scanner) so I can continue this awesome hobby. You guys are great!
EDIT: Seems my mother found that the boys hand looked rather odd.. So, I tried to add on an arm like two of you did before. The result wasn't as I anticipated, but it please mother.. So it please me too