It creates a 10 slot giant permanant bag that fills a bag slot that can also be used for alchemy. Original still fits back into a bag. When your done empty bag and destroy it as you can always reclick another. I use these on alts for when more bag slots are needed.
Best place I have found the thick grizzly bear skin is Misty Thicket. First time was 5 young grizzlys up, 2 skins dropped. Second time 3 were up and still 2 skins dropped. Suggest the black bears are PH.
I get my spiderling silks from the big spiders in Goru'kar Mesa. Kill them and there is a chance for 1-6 spiderlings to spawn. They each have 1-3 spiderling silks.