how would i create this soft fluffy look of spanish moss?

Not sure about which makes best results, but you can add vertex displacement with noise texture. Just make higher poly sheets 30x100 vertices or so. or if you can automate make shape of sheet follow all twigs (and then displace them with vertex and noise).

This will remove that feeling of flat plants.

ps.
I think its not about shaders, it is more about making textures and meshes that use unreal in best way.