Hello 4pigs!
I consider myself quite well-qualified to talk about this as I have made about 25 cozies this week lol!
I followed those instructions to make my first cozy and they are very good.
In my opinion, a minimum size to cut out should be 12inches by 12inches. Don't bother with anything smaller as this is the size needed for an adult to get in and turn around, which is how the piggy will use it.
Once you have made the two 'tubes' and sewn them together to make one long tube (as in picture 6) you need to add the wadding. This is the trick to making them stay open and is the reason that cheaper cozies have to be used as blankets. I use 2 layers of 2oz wadding for standard and large cozies and 3 layers for XL. People say that my XL cozies stay open really well. You can, of course, use 4oz or 6oz wadding if you have it but I use 20z because I make so many different types of items I need the flexibility.
You need to sew the wadding into the seam shown on picture 6 all the way round: otherwise when you wash the cozy it will fold over inside the cozy and you won't be able to get it straight again. It will be like a wonky duvet inside a duvet cover but with no means of straightening the duvet out!
Once the wadding is in place, turn the cozy out with the fabric you want to be on the outside of the finished cozy on the outside. Then finish it off with a french seam to make the cozy completely reversible: sew first along the bottom of the outside, making sure you are sewing through all thicknesses of fabric (including the wadding), as the lining fabric tends to slip back inside and you find you haven't actually sewn it! Then trim the seam, turn it out the other way and sew the seam again across the bottom.
For anyone who can't sew, this is what you are paying for when you buy a decent cozy!