For your labels I'd start with an 8-10" hoop. That way you have room to move around and yet it's not so big to be cumbersome. As your skill increases the size of your hoop can decrease somewhat. A lot depends on what size label you want and how much info you want to put on it. When you get good enough to make tiny stitches with fine thread you might even go down to a 3-4" hoop. Embroidery isn't hard, it's just like anything else, it takes practice. My older sisters taught me when I was 4 yrs old so you know it can't be too difficult. When I started Kindergarten (at soon to be 5) I already had two sets of pillowcases that I'd embroidered. Muslin is fine, you might even try black cotton with light colored or white thread too.