L.R.
Fabric paint on stamps. You'll need chunky foam stamps, not small rubber stamps. Youngest kids may dunk in very shallow pools of fabric paint but show the older ones how to use a brush to paint the paint onto the stamps for really nice, clean stamp images. I do this with some very nice floral and vine stamps I have to make tote bags for adults!
Consider using what is called "dimensional fabric paint." It's also known as "puffy paint" because it looks puffed up on the surface of the bag. Kids use this right out of the little squeeze bottles in which the paint comes, so experiment to be sure kids don't squeeze out a glob and use up a whole bottle at once. (I'd save it for the oldest kids. They will love the way it looks.)
Or use a good fabric glue -- really needs to be a fabric glue -- and let them glue on anything: Thin wooden shapes from the craft store; plastic beads; sequins; feathers. Yes the stuff will eventually come off. The paint option will last longer.
Or use fabric glue to attach felt shapes. You can just have lots of colorful felt and let the kids cut out whatever they like, even make scenes or cut out letters for names etc., and glue them onto the bags. Alternatively, you can buy felt letters at craft stores and the kids can just use those.
If this craft has a theme of some sort, have simple patterns the kids can trace around to make felt shapes that fit the theme (beach: balls, umbrellas, sun, fish, crabs, etc.--that's one example).
Be sure, whether gluing or painting, to place a section of newspaper inside each bag. This prevents glue or paint from soaking through and either gluing the two sides of the bag together or staining one side with paint from the other. And if you have time, wash the bags first --but with 120 of them, that may not realistically happen!
I hope you and the kids have a great time.