I am making my puppet and so far I have the armature. I was wondering if you could make clothes out of real fabric and fit it on the armature. If so how would you do that?

well you would want to put cushion foam on the body first to give it a bit of shape

then you would sew the clothes ontop, heres a tutorial http://www.stopmoshorts.com/gallery/index.php?action=showpic&cat=16&pic=960

that helps a lot