So glad you were able to get the names done for your friend. I just found this thread - I embroider on felt a lot because I make bookmarks for my daughter's students. She teaches 5th grade and as a Christmas gift every year I make the bookmarks as an encouragement for them to read over the break. It embroiders so easily. I do use a tear away stabilizer underneath because the ones I make have a satin stitch edge.
A friend wanted the make an Accuquilt Hallowee train for a bag for her daughter and it was too hard to sew them directly onto the bag, so we put the various cars on felt, cut them out as if they were patches, glued them on the bag with Fabric Fusion and tacked them down with a few stitches for a bit more securing and they looked fantastic.