How about modeling a "folded" bag, make it a Cloth, add a pin group set to the top vertices and apply some simple shapekeys? Here is a quick example:
With more geometry and some experiment a bit more details can be added...
I can't say for sure but to me your metarig doesn't look exactly like the default metarig. I.E. the five tail bones instead of four. And since you mention several edits, my guess is that you don't do them the way it's supposed to be done with rigify.
So just as a testing purpose, I'd suggest you try from a fresh scene and re-do the metarig bone positioning ...
Okay so I figured it out and will post the answer just in case a new 2D animator runs into the same issue.
The problem I had is solved with setting keyframes for the new layers (ink, color, shadows, highlights, etc..) on another frame in the dopesheet.
Because I had those layers only active on 1 frame in the dopesheet the image showed through the whole ...
To render an animation.
1st press 0/Ins key to go to camera. But here we can see that camera is not capturing the text, we need to adjust that first.
This view you are seeing without camera is perfect to set the camera.
Now to set the camera to the view you are seeing, HIT Ctrl+Alt+0
Select the type output of animation like Image Sequence, ffmpeg(video) ...
Turning the barrel organ handle -
The handle is animated to rotate.
The right arm hand-bone's 'Pole Target' (in Inverse kinematics) is set to the handle so it is forced to stick onto and follow the handle.