Both smooth cotton or rougher canvas can work well. It can be harder to get complete coverage on rougher textures, but if you don’t mind some ‘dry brush’ effect (paint strokes are kind of speckly-looking instead of solid, and a small less detailed), either will do. Suggest you test one of each and see which one you like the look and feel of better. The vital thing to know is that fabrics you plot to paint on need to be pre-washed and dried, without fabric softener or dryer sheets, before you start, so the paint will adhere well.
As to paint, acrylics are the most commonly used and simplest to work with (watercolors aren’t permanent). You either need ‘fabric paint’, or if you already have plain craft paints, you can buy ‘textile medium’ to mix with them. You can get the right stuff at any craft store (my local Walmart still carries several kinds very inexpensively). Follow the directions on the paint (or textile medium) about drying times (usually 1-3 days), heat-setting procedures (either ironing or tumbling in a dryer for a while), and how long to wait before washing, and you should have a bag that both looks excellent and lasts well. You can also use paint pens or fabric pens for finer work or to add details.
Excellent luck!

The smoother the surface, the better the paint will be absorbed & will provide a crisper image.

Take a scrap of each and see which result you like best.

Use fabric paint.

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