Yeah, I had one of those cheapo pillows with some kind of synthetic filling, which I knew because the pillow already had a huge hole in it. I think my wife would not be pleased if I requisitioned one of her nice pillows
If you do use that method, I found it helpful to place some loops of tape at various points around the ball to secure the stuffing material before I wrapped up the whole thing. Double sided tape or glue (if you're fast) would also probably work. I could see a towel being a decent option, but I doubt it would be as soft. My way actually worked out better than I expected. The best part was that the synthetic material came apart fairly easily (but not TOO easily), so I could even out the lumpy spots of the ball while I was wrapping it up by ripping off pieces of the padding sticking out between the tape. And, as I said, it's soft enough to make getting hit in the face by a 20# ball a lot more pleasant than I would have thought
I do like your tennis ball idea, although I imagine that would require a pretty substantial hole in the basketball.