An elderly witch who lived at St. Oswald’s Home for Old Witches and Wizards (CC1.13).
The Wool Woman had been enchanting some knitting wool when Albus and Scorpius arrived at St. Oswald's. She seems to speak for everyone in the room when she expresses her opinion that Amos Diggory is an unpleasant person (CC1.13).
"WOOL WOMAN" is merely how the CC script refers to this otherwise unidentified witch when she speaks her one and only line. Presumably, she is the person who had been enchanting knitting wool and gets her name from that. Note, however, that no one actually calls her this.