Flannel can be used in the same way that most cottons can be used. It does have some differences such as pilling problems if the quality is poor, a more open weave that tends to shrink a lot when washed and it's a bit thicker. I don't see why you couldn't use it for a purse. I probably would go with a simpler construction with fewer pockets or flaps because they won't lay as flat as cotton and the seams will be a little bulkier. You could do the main part of purse with another fabric and use the Betty Boop as accents.