Full disclosure, I mostly use my Martha Stewart Living subscription as fodder for making envelopes from the pages. They always have such nice flower arrangements, for example, that make excellent envelopes. When rummaging through the latest issue, I happened upon a sweet tutorial for making envelopes out of fabric scraps. It seems pretty easy and the finished product is lovely.
These would be killer if you also embroidered on the address! The directions have you coating the fabric with decoupage solution (it's basically watered-down Elmer's glue) which will dry rather stiff. I bet that if you were to sew up your envelope seams, rather than using the glue, you'd avoid having stiff seams and could get away from having a stiff envelope. I mean, they are lovely, but if the fabric isn't fabric-like, then why make it into a special envelope. Experiments need to happen with this. Would love to see some if you give it a try.