They're sewn on.
You print on the material (make sure it's the right size)...cut them out...punch a hole (using a standard sized hole punch) on either end...and pop them in the oven. The package suggests using vellum both under and over the shrinky dink when you bake it. This is what I found works for me:
Preheat oven to 325
Place 1-2 tags directly on a cookie sheet
Place a small peice of vellum on top
Bake for 2-3 minutes, keeping a very
careful eye on them
Once they've shrunk and then flattened out again, take them out immediately
I use a small plastic spatula to take them off the pan and then quickly
flatten them if necessary
Be careful or you will end up with a plastic covered cookie sheet.
By not using the vellum underneath, the baking time is significantly
shorter so don't follow the package times...use your oven light to keep close
watch on them.
Yup, that's it.
As for measurements:
I think my original measurements were 10" by 12"...I'll have to measure the final bag...