I just did a paper bag floor in my new back porch and the poly that is used on it is tough and doesn't scratch very easily. I think if I were in your place I would mod podge the fabric down then cover it with 2 or 3 coats of the floor poly. I used water based so clean up was easy and it wasn't smelly.
I have tried the oil cloth and I seemed to catch my pins in it and ended up tearing it to shreds. But it is worth a try.
Lynda