Morph 'and Chas'
Alan pointed me in the direction of an eighties TV show called 'Button Moon' using puppet characters made of (and based on) kitchen utensils. The main character Mr. Spoon travels to Button Moon every episode in a rocket ship he made himself (One that bares a remarkable resemblance to a baked bean tin) And his family sometimes appear in various episodes. (Such as the one featured below) Much like 'Little Big Planet' entire worlds are created from various found objects.
A few other TV Shows of note with interesting background/environment choices, or general material theme.
Of course there is the felted, fuzzy world of 'The Muppets'. A puppet by Jim Hensen and first created in 1955. It became a very popular franchise spawning into many films as the puppets go on their adventures. They have large theatrical sets, but its the puppets that are the most interesting with their zany whacky brightly coloured designs.
'The Magic Roundabout' was a French invention from 1963 by Serge Danot. The original series was too difficult to translate so the BBC had a new version made (using the original stop motion) with English scripts. It was broadcast in the UK from 1965-1977. The environment is intriguing because of its abstraction and 2D nature and the bizarre colour combinations.
'The Herbs' was another kids TV Show, created by Graham Clutterbuck and broadcast in 1968. It was a fantastical garden world that was inhabited by a mixture of humans and creatures with herb based names.
Finally here we have 'The Clangers' a stop motion animated series consisting of knitted alien characters who live in a Blue Moon.The first episode was broadcast in 1969. One of the most memorable features was the way in which these creatures communicated with one another. They did it in whistles that represented a language. But the gestures, body language and a narrator would usually guide the way as to what was happening in the story.