Wool felt is totally different than felted wool. Felted wool is 100% wool (or close to) that has been washed in HOT water and dried in a hot dryer to shrink the fibers so it won't unravel and is expensive. It gives the item you are appliqueing a rich look. Wool felt is simply felt that contains maybe 20% wool, comes in solid colors (any and all) and is so much cheaper, and can be easier to work with. Wool felt usually doesn't have to be washed in hot water before using.
I quilt and do wool applique.