Thank you kellen, but I like them so much (they each have their own personality - creepy...) that I also just give them away to friends and family.
I cut a circle of fabric, stuff it with a bit of batting, shove in the steelwool and sew gathers around the edge and pull it up tight so it is like a button of fabric. I then add another glob of glue into the cup and put the stuffed "button" inside and hold it down until the glue sets, about 3-4 minutes.
I use pretty much the same method, without the steel wool - don't like the feeling of needle on steel. Also, I think it's good to check how easily a needle goes through the fabric. Sometimes fabrics are woven so tight, the needles leave holes and it's hard to get them through.