If you opt for the latter, you'll only pad and upholster the exposed part above the mattress line.
If you're goal is to upholster furniture, you'll need a durable heavy weight fabric.
The price of the sofa will be determined by its size, whether or not it is mass produced, where you buy it and what kind of material is used to upholster the sofa.
Decorating fabrics are used to create window treatments, table coverings, rugs, throw pillows and upholster furniture.
You can even spray paint or upholster PVC pipes and fittings for a custom shaped window treatment.