I've made about 8 pairs from felted and unfelted wool. In my experience in using them for the last month, the felted recycled longies are as reliable as my wool jersy covers, like my Sugarpeas, and can be worn overnight without a worry. The unfelted recycled longies are more day weight and comparable to my knitted soakers, like my Bridgets. They do still work for us overnight, I just need to make sure there is a good absorbant diaper underneath. I like the unfelted ones better, I think they are more comfortable for my baby to wear especially right now when it isn't super cold, just cool fall weather.
There is definitely a huge range of wool quality in wool sweaters, if it is itchy in the store I don't buy it. But the thrift store where I have found my sweaters has literally hundreds to chose from, so it has been easy to find ones I like. I even found a prefelted Italian merino wool sweater that I can't wait to use. I haven't paid more than $2 for any of them, so I feel free to make as many as I want.