We actually made notebooks from plywood in our highschool woodworking class :3. I gave the one I made to my mom tho

Nothing wrong with wooden covers. Wood-with-something-over-it used to be quite a common material for the purpose in the days before mass-produced cardboard covers.

Only thing I'd be concerned about is wear on the string, especially if you didn't sand inside the drill holes. If it does wear through, after sanding the holes, try putting some beeswax on the replacement string.

Great idea, gg! And great remark:

newsprint sketchbooks are ridiculously expensive.

+1 only because I can't do more.

I am both proud and ashamed of it.

Don't be, you should have a look at my (non woodworking) cheaply handmade notebook. Unlike your sketchbook, my notebook is ugly as hell (made out of recycled plastic, and cardboard) but no matter how ugly (and cumbersome) it is it's still the best notebook I ever used... in the last 40+ years. I'm loving it ;)