I just looked into what the puppet tool can do and it looks interesting - I just don't know how that transforms to what I want to do.
I tried to sketch out, what I want to achieve. Maybe that makes it more clear. I want it to look like let's say a string of wool wiggling around and forming a text. Would I create that string in After Effects or start of in Indesign or Photoshop?
I've tried to do a similar thing. I think what you're going to have to do is use either a shape layer or a mask with a stroke effect. Then just animated the path. Make sense? Let me know how it works out.