Since I am male I do not have direct knowledge with babies but I do know what a rough sweater can do to a bare nipple.
For knitted pads I wander if felting soft wool would do for a pad, except for the heat factor?
I know that this is not knitting, but, I saw a number of suggestions on line to making nursing pads out of cotton diapers. Cut five inch circles of diaper, stack two on top of each other and sew them together. Very absorbent, soft, and washable.
Other suggestion was to use flannel instead of diapers. I would be concerned about the flannel pattern showing through the bra and blouse. Personally, I think a combination of flannel on the inside, to make it pretty and white diaper on the outside for concealment.
I think I will go get some chocolate and more in touch with my feminine side.
Added comment: what would a diaper liner to a knit lace outer layer be like. The diaper would be soft and absorbent and the lace outer would add a bit of fancy lacy feel. I understand after nine months of carrying a baby and then the lack of sleep once the blessed child arrives that sexy feeling is not always there. Would that little bit of hidden lace help?