I'm trying to make sense of your family memories
I am also doing what I advise not to do and that is making things fit 
Margaret and John Knowles had a child James 1905 who I think died in 1908. However, you need to look at the entry for Margaret Knowles in 1911 
Margaret had a child Dorothy in 1913 - no father named on baptism.
Maggie had brothers James and John.
I know, I can imagine my mother is getting very frustrated that I didn't listen enough .. but I did

I just so want to make sure its right for her and Percy.
If Maggie had brothers names James and John that is good as mum defiantly met Percy s brothers. One believed he was Jesus and was mad as a hatter. But if James died mum can't have met him.
She never mentioned a Dorothy

I am wondering if I can find Maggies (Margarets) death certificate in some way and work back that might validate it. Mum remembers visiting Margaret in an asylum around 1950 and she died around that time.