What materials are used to create Forsworn armour? (Pixels, you say? Har har har. Get out of here, smart arses.) I see fur, bone, gold (?), leather... More specifically, though, what's the material under the fur on the torso piece? Is it bone? Leather?

Damn you, compression!

I'd guess leather!
pic:
http://oyster.ignimgs.com/mediawiki/wiki-api.ign.com/the-elder-scrolls-5-skyrim/thumb/9/9b/Itm_Armorofoldgods.jpg/468px-Itm_Armorofoldgods.jpg

I would say leather or some kind of animal hide.

Leather I assume, with some skulls and bones attached. Lovely

Animal hide?

I assumed it was bone because if you look closely pieces overlap... which I thought you wouldn't want to do with leather, or at least not inconsistently. That is, if you're going to overlap the pieces of leather, go all out and make several overlapping layers. I guess it makes sense that there's not too much planning or logic behind the armour, though.
And the texture of the material is wrong for leather, too. I thought they'd, I don't know, killed some huge creatures and used their scapula's or something for those bits. XD
I overthink these things.

Can you actually craft forsworn armor? I've gathered the full set and i could but improve it a little. Can you upgrade it further and further like the other pieces?

Yeah, you can with all armor.

It's mostly fur, leather, feathers, bone ETC ETC.