Thats lovely to read - things can so easily be taken out of context when written down rather than spoken - its nice to see people helping one another out. 
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Hi Kim,
I help admin a group on facebook which helps people with their CE marking. Here’s a link to it for you: https://www.facebook.com/groups/779808745368557/
I also wrote a blog for a Handcrafted Business about it : http://www.ahandcraftedbusiness.com/ce-marking-for-handmade-soft-toys/ hope it helps.
Your bags shouldn’t need a CE mark though I was advised by my TS (I make little bags too) to make sure I don’t put them with my toys when I’m selling them at a craft fair.
From what Trading Standards have told me they don’t automatically fine people if they don’t have a CE mark on things, they tell them to stop trading until you get things sorted. It is a daunting process, but there are lots of people to help you through it.