What are they used for?

Rolls of Paper can be used to make Scrolls of Conjure _____ Atronachs at the Atronach forge under the College of Winterhold. You also need one for a quest.

Linen wraps are just there for decoration.

If you have one in your inventory and a piece a charcoal, it can be used in a certain quests to copy a tablet. I do wish more could be done with it though.

Oh cool! So far I only summoned them there! So, I put the roll into that contraption together with the respective gem and the salts?

I'd recommend http://www.uesp.net/wiki/Skyrim:Atronach_Forge to see how you can use the Atronach Forge and what you need for each thing.