Step 2: Pinning and Sewing the Body
Fold under and pin any raw edges that have just been cut and sew along the edge so that they won't unravel (if you have a surger you can just serge these edges.)
2. Sew Edges Together
Fold the body piece so that the edges are lined up and it is inside out. Figure out how far you zipper will go down on the side by laying out the body piece with the hoodie and zipper (see the third picture below). Mark the end the zipper with a pin. Sew the open bottom and side edges together, leaving from the pin till the top edge open for the zipper. If you want this to be a Halloween costume simply do not sew the bottom edges together.
3. Round Bottom Corners (opt.)
To give the creature a more caterpillar look you can sew rounded bottom corners, making sure to keep the bag inside out while sewing.