How can I convert a "grid" of textured quads to a single mesh?

So, quick description of setup:

 +GameObject Grid
      -GameObject GridSquare [MeshRenderer / quad / mobile diffuse with image)
      -GameObject GridSquare [MeshRenderer / quad / mobile diffuse with image)
      - (...)

Each Grid is "generated" with a script; this same script determines the image and rotation of each child's transform. It also takes care of deleting "old" grids when the player is far enough off from a dynamic "center point".

I am observing a significant performance drop as the amount of these child objects created increases, and am wondering if perhaps using one single GameObject with one single Material, Mesh, and texture would help enhance performance. Even during grid creation, which I am doing 1 square at a time using a coroutine, each instantiation seems to cause a tiny spike. Thoughts?

If I were to want to build this custom plane / texture / material, what would be involved? I'm guessing there's no "magic" MergeObjects() type method out there? Anyone know of any good tutorials/guides on this topic?