It made bubbles of, per wikipedia,
polyvinyl acetate dissolved in acetone, with ethyl acetate plastic fortifiers added. The acetone evaporated upon bubble inflation, leaving behind a solidified plastic film.
Which looked like,
And here's a 1970's commercial. Especially headphone users, would recommend starting low and easing into it.
According to wikipedia, yeah. But it sounds like the risk was more about accidentally inhaling the fumes when inflating it, than the bubble itself afterward. The most noxious parts evaporated. But you didn't want to take air in through the straw.
Besides the potential for spills when liquid plastic was handled by children, the substance also emitted noxious fumes. The fumes could become concentrated inside the straw, making it dangerous to inhale through the straw while inflating a bubble. The toy was not recommended for children under 5. Because of these problems, Super Elastic Bubble Plastic was eventually discontinued.