You have two options for a lining--actually three, I guess if you want it more sturdy than I usually worry about. Usually I just lay out the fabric I've now created for the bag and cut a piece that's the same size, pin the pieces together and start sewing pretty stitches on each seam. I love to use a different stitch for each seam and usually different colors too--I'll do the same stitch and color randomly on a few seams, change color and stitch and do a few more seams, etc., etc. You can do the pretty stitching just on the fabric if you want. You can make a lining by making a second bag that you sew inside. You can also make the bag quilted by using batting, fleece, or there's a really thick pellon if you want something with lots of oomph. For this bag, there are four combo strips and six narrow red strips and two blue strips that all got sewn together into a tube after the pockets got sewn on. Sometimes I'm not paying attention and pockets get sewn on later when it's really inconvenient--like after the whole bag is just about finished--what, me??? I've been known to add velcro to pockets very late in the game. Anyway...after the tube stage, the bottom was sewn across, and then the corners were squared off. http://sewing.about.com/od/freeprojects/ss/totebag_5.htm shows how to do it really nicely.
For handles, I just use strips about three to four inches across and turn under on the long sides. I like to sew down both sides with a pretty stitch--this works to give them a little stiffness and makes edges stronger. I do make sure to sew them on really well. Also sew the pockets on well with a little triangle stitching at the top of each side. You can add inside pockets if wish.
Hope you find this useful. People seem to like the vividness of the bags I make for them. As I showed in a previous post, I try to personalize them for the colors they like and their interests. I usually do add a little ladybug embroidery and/or hearts someplace to most of what I make. Since this was for me there's ladybugs, hearts and flamingoes--a little thing between hubby and me. Have fun trying this idea out. I'd love to see what you come up with!