Suggestions: hooked rug using cut lengths of wool yarn hooked into a burlap base, or specialised rug canvas. Wool can be recycled. . . Latch hook required. Can also be done with fabric strips. We had these left over from WWII times. . .
Punched rug, special tool needed, burlap base. recycled wool yarn again
Yarn made from left over or recycled fabric cut into lengths and knitted or crocheted to shape; T-shirt 'yarn' rolls nicely, but may not be all cotton - best for smaller projects - it can get unwieldy.
Fabric pieced shape, backing and then quilted, no stuffing
Blanket, embellished with embroidery sewn on shapes, whatever ideas occur
Ha! the last two could be "fused".