I remember having a little box imported from England, the Fuzzy Felt Hospital. (I still have it somewhere). It consisted of a little board topped with a felt-ish material, and little beds, pillows, nurse uniforms, heads, and other appendages that you could manipulate into sick bay scenarios.
Felt is satisfying to work with; it never frays or unravels, unlike nerves. It's actually fun to cut with pinking shears. I remember making many needle case covers with my grandmother. I have one of hers.
I'm made several felted bags (although I've read that felted is not the correct word in this case), which are enormous after you knit them. Shepherding them through their stint in the washing machine is a bit tense. You don't want them to get too small, but you want the fibers to shrink and mesh so that they are sturdy enough to take everyday abuse. L has one I made, not bad looking!
This bag is from the Amazon site for Pursenalities, by Eva Wiechmann, but is done in the pattern I knit for L
Here is a YouTube instructional video from the Crunchy Parent on how to make a felted wool ball. Notice cats in background: