You can use any of the TB glues, Elmers Glu-all, Elmers Carpenters Glue or even Elmers School Glue. They all will work just fine for glueing down cloth, rawhide or snakeskin backings. Some of these glues dry yellow or tan and others dry white or clear. If you want to paint on a design I know for a fact that Walmart's acrylic craft paint is compatable with these glues and adheres well.
Linen is a very good backing material also. Have you looked at your local thrift store for silk or linen garmets that you could recycle into backing material. You might even find something with a cool pattern on it. You can buy silk neck ties at most thrift stores for just a few bucks.