Man has been building straw/mud huts for thousands of years. It's not a hippy thing. The families who settled the great plains built sod houses not much different than you see in the movie Braveheart.
Maybe a topic for chapter 2.(?)
As for bailed straw, it has considerably less moisture content then hay.
Roughly, that translates to less mold/mildew issues. And in large quantities, less chance of spontaneous combustion. I know a guy who lost a barn because he stored hay that was too wet.
As it decomposes, it can also be culled out and used for bedding, gardening, fuel and probably a half dozen other things like weed control etc,,,
Obviously, this is a 'no smoking' area.