The lining is polyurethane coated fabric and the closure is velcro.
I'm not going into the details of how to make these. There are a number of variations on the web, and instructions on how to make them as well. This is a link to this particular style, but I haven't "gone over" the instructions to see how they differ from what I did. We did not end up with the "raw seam" issue, because we sewed it almost up, turned to the outside, then stitched across the 3-in. opening.
Also, we sewed a "triangle" on both sides at the bottom to create a roomy bag.