She preferred to let her subjects discover for themselves that the terrible Spaniard before whom the whole world trembled was but a colossus stuffed with clouts.
Here, I suspect, given the mainly naval war between England and Spain at the time, "Clout" = sails or canvas rags.
The history of "clout"(n) is interesting, it developed a strong association with some sort of cloth.
A clout starts life as a patch of anything:
I. gen. Piece, patch, flat piece, shred.
1. A piece of cloth, leather, metal, etc., set on to mend anything; a patch. archaic and dialect.
a700 Epinal Gloss. 789 Pittacium, clut.
1570 P. Levens Manipulus Vocabulorum sig. Siv/2 Ye Clout set on a garment, or on a shoe, cento.
Clout then moves to some sort of material for general use:
II. spec. Piece of cloth, a cloth.
4.a. A piece of cloth (esp. a small or worthless piece, a ‘rag’); a cloth (esp. one put to mean uses, e.g. a dish-clout). archaic and dialect.
?c1225 (▸?a1200) Ancrene Riwle (Cleo. C.vi) (1972) 158 Þe deoflen schulen pleiȝen wið him..& dusten as an pilche clut.
1762 L. Sterne Life Tristram Shandy V. vii. 49 Driven, like turkeys to market, with a stick and a red clout.
Clout is then adopted for particular use and here refers to a piece of canvas
†6. Archery. The mark shot at: see quot. 1868; also, elliptical, a shot that hits the mark. Obsolete.
1584 W. Elderton New Yorks. Song sig. A/3 Archers good to hit the Clout.
1868 F. J. Furnivall in Babees Bk. (2002) Notes p. ciii Within 30 years they [sc. Royal Archers, Edinburgh] shot at a square mark of canvas on a frame, and called ‘the Clout’; and an arrow striking the target is still called ‘a clout’.
The canvas clout then becomes a metanym for a sail (which were made of canvas.)
>†5.c. A sail of a ship. Obsolete.
a1610 J. Healey tr. Theophrastus Characters 86 in tr. Epictetus Manuall (1636) When the Pilot gives the ship but a little clout.
which may have given rise to
Clout: 2b. Personal or private influence; power of effective action, weight (esp. in political contexts). slang (originally U.S.).
1958 Chicago Sun-Times 14 Dec. 78 Defendants in Chicago, as in Los Angeles, are found innocent on the age old legal premise of ‘reasonable doubt’—not, as the judge insinuated, ‘reasonable clout’.
with someone seeing the relationship between the area of sail and the force given to the ship.
However, in the background since c.1400, there has been another meaning of clout that appears to have a different origin:
III. A blow or strike, and related uses.
7.a. A heavy blow, esp. with the hand; a cuff. Cf. clod n. 11. *(11. A heavy solid blow. dialect. (Cf. clod v. 5, 6. 1886 Pall Mall Gaz. 25 Nov. 4/2 The man..lost his temper, and hit her a ‘clod’ in the head..A clod is a heavy, lumping blow.) Now dialect or vulgar.
a1400 Isumbras 619 There was none..That he ne gafe hym swylke a clowte, etc.
1887 W. Besant World Went v. 42 The gunner..found time to fetch me a clout on the head.
If we follow this clout/clod a little further, a clod is also
2. A coherent mass or lump of any solid matter, e.g. a clod of earth, loam, etc. (Formerly, and dialectally still sometimes, clot n. See also cloud n. 2.)
which will account for *horse clouts/clods"