I suggest the name Wool Emergency Blanket, as they are not necessarily cheap, also think of the impression that would give to new players. I would suggest the name “Wool Emergency Blanket” as that clearly tells the player what it is made of. As for a name for the metallic/space blanket, I am not sure.
To see some code about the increasing volume there is always the packed LAW (was that the name, it is a rocket). It gives you exactly what you are looking for, originally packed up and once activated it increases in size, therefore becoming weldable/wearable.
But I am also interested in i2amroy’s idea of vacuum sealing an unpacked space/metallic blanket to become it’s compressed state, that would be both fun as well as useful.
Another idea that must be taken into consideration is what is the difference on where these two different blankets will spawn?