One of my "genres" of YouTube videos, since I got broadband a couple of years ago, is How-to Scrapbook Hobby vids. And there's a format of mini album called a "meander book", where a single sheet of however-big sheet of paper (standard size for crafting is 12 by 12 inches) is folded into sixteenths, and then the three vertical creases are cut in such a way that the resulting paper likes kind of like a big paper "W". Then, the horizontal creases are folded accordion-style, and are glued together at the very edges, to keep them together. The result is a mini-book with seven 3-inch square pages, and every single page is also its own pocket, for the maker to slip extra notes and things inside.

...Seems to me, this would be a perfect idea for a cloth book, and straight stitch along the folds, instead of gluing. And, since you're stitching, you won't have to worry about fraying, and could use a sturdier, more adult material than felt or Pellon, such as denim or light canvas.