Cloth
To a narwhal, a towel is just normal cloth. They're always wet so towel cloth is all they know.
Picture a narwhal wrapped in a fuzzy towel blanket, with a towel tail cover, and some towel underpants. Everything is made of this type of cloth.
ふ
ぬの
None
If you use this type of cloth for your clothes and blankets people will call you a fool (ふ). They think you're a fool who can't tell the difference between human cloth and towel cloth.
"You fool, you aren't a narwhal, that cloth isn't for you!" they say. They're so mean.