I seem to remember Sylvanian clothes having wee little hems. My machine wants to eat wee little hems; even for these seams, I used tissue paper to keep them out of the feed dogs. Sylvanians are mass-produced, so this is doable.
Microfiber would work. The green floral I used is a microsuede, which is a similar idea with a more robust backing. The blue fabric is thicker, so it looks proper wintery. It might make good curtains, if I can find a way to cleanly cut holes.