That is simply FANTASTIC!
It's pretty accurate in terms of Spell level and power/ability at the given spell level. I can easily see each of those spells working. Maybe a little "a-la-Disney" with some "bippety-boppety-boo STAB!" thrown in there.
The list is really good! I can see one of my players using the list. All we need is some extensive playtesting to balance the levels out.
I can see at least two lists here as crochet uses a single needle with a 'barbed' or hooked end (similar to a tiny harpoon) and tend to be quite small, and knitting which uses two longer needles, straight and smooth. Knitting needles can range from smaller than a pencil to the thickness of small PVC pipe. And I supposed one could argue it could fall under Two Weapon Combat too.
Material Knitting: Caster is now able to knit with heavier materials as if they were yarn. Rope, wire, light chain. Imagine knitting AT-13 chainmail. Sweet!
Work Materials: Caster has the ability to spin materials into threads suitable for knitting; Work steel, copper, silver, gold, Mithril into yarn suitable for knitting.
Defensive spell list too.
Knitting Needle Deflect: Knitting needles float in front of cast and spin to deflect incoming ranged weapons = 5 ranks of Yado.
Spell reflect: Knitting needles spin so quickly they have a defense bonus to reflect 25% directed spell damage back to caster. This percentage reflect increase with higher level spells.
We can work out the specific wording over tea and crumpets tonight by the fireplace.... say 7-ish?
OMG. Do you see what you've started here?
Some fun ideas there but a lot of important specifics are missing, e.g. what is the OB for Animated Needle?
I would argue that it is Directed Spells skill as the caster is making an attack at a target.