If I had Old Nan in play could I kneel her to remove Balerion the Black's dragon trait if Balerion is in hand? The fact that Old Nans ability says choose instead of something like 'name a character' makes me think that I can't.

She cannot be used on cards in your hand. Even if she did say something like "name a character," it probably wouldn't work on cards that were not in play.

The default in this game is that effects can only be used on cards in play unless they specifically say otherwise.

Ok. Thanks!