This is a great idea and really want to do this for my son.
WHAT YOU NEED:
Hula hoop
Fishing Line
Sheet
Most hula hoops have a seam that you can separate Then you can just slide the sheet on and hang with fishing wire. If there is not an easy seam then you can use hot glue to secure the sheet around the hula hoop. Make sure to get a large enough sheet so that the draping will be larger at the bottom. Then add pillows and you have a nice comfy corner for your little ones.