A method of forming a series of bags for bulky articles from rolled thermoplastic film and padding element includes arranging a linear, longitudinally traveling queue of layers of film and padding element according to a set of desired bag dimensions and characteristics and controlling the advancement of the queue to make padding element and seal cuts to form the bags. The invention also includes a system for fabricating bags substantially in the manner identified in the method of the present invention, as well as a method of forming seal cuts in which an envelope is first clamped, then sealed and cut by heat and pressure, then allowed to cool before being released.