I'm a puppeteer & art therapist & have used many techniques using puppets
using anything from balloons as a base, model magic, sculpy (although it
breaks if students perform with it), papermache, cardboard, found objects,
cut outs, etc. depending on age, cognitive level, frustration level, etc.
We puppeteers joke that we have a plethera of paper towel rolls, unused
chopsticks and an assortment of junk and we don't know why we collect them....
My main suggestion is don't use flour & water (esp w/o bleach) unless you
want bugs & rodents (and the occasional rabbit) to eat them...
As for the cotton ball idea, it would be a good idea to reinforce it
w/paperbag paper... if the kids can handle another step...It's probably
stronger than tissue mache, but even with model magic I reinforce with
papermache & gesso, especially the hands.
And the super sculpy doesn't take paint well...so I often cover that with a
layer of mache or Sculptorcoat (for my own work).
Email me if you need any other ideas...