Needle felting. Passing a barbed needle through multiple layers of felt, cloth, or roving to create embellishment. This is a craft that a lot of people are getting in to.
I'm not good at felting so I'll put up some tutorials for those of you who think you might be good at it!
If you're not good at it but you still want to pursue it, there are now specialized home needle felting machines to help your quest. :)