1. Try looking at model railroad hobby materials on-line dealers. HO/00 = 1:87.086. UK in particular N gauge refers to a 1:148
Z scale (1:220) is one of the smallest commercially available model railway scales. So, it would seem that N-scale figures are your best bet.
2. I would think a fine weave fabric with some body. cotton from an old dress shirt might work. You could either saturate with a wood glue, form the blast bags in place and paint when dry. or do them without the glue. Painting them without the glue would still stiffen them. By the way, we usually refer to them as "blast bags" or "bloomers"
If the gun mounts are not attached yet, you could also use some of the other methods shown in this forum, but I'm thinking that at 1/200 you might be looking for a more fabric look. but to get an idea, use the search button at the top right of the page and search the terms I quoted. You will find many, many hits
Russ