there are two distinct ways to go on this.
1) Cotton When I studied with Martino, he told me the secret he used on his early albums like Strings, EL Hombre, East, etc.
He used upholstery cotton and LOTS of it. For this technique, it's not enough to just put a towel or a couple bags of cotton balls. You have to put enough to put pressure on and dampen the vibration of the top. Everytime I bring this up folks poo-poo this saying that it ruins the sound of your archtop. Yet, the proof is in the pudding. Listen to those albums. To me, they are the among the absolute best jazz guitar tones in history. You will need a couple lbs worth of it minimum. It should be so tight that when you push down through the F hole, there is very little give. It should be solid. This method was shown to me and advised by martino who told me I didn't have enough cotton packing when he could manually compress the cotton through the F Holes! Black velvet underneath the F Holes makes it look better on stage.
2) Packing tape This is what guys like George Benson, Paul Bollenback, Rodney Jones, Henry Johnson and others do. They put clear packing tape over the F Holes. This technique doesn't dampen the top vibration so if you're playing with an acoustically loud band with loud drummer and/or saxophonist, you can still get the acoustic vibration to induce feedback but it is very effective at reducing the guitar's tendency towards feedback on it's own and yields more acoustic tone than the cotton method. Some folks have complained about it doing damage to the top but if you have a modern gibson with polymer'd lacquer or an ibanez with urethane finish you'll be fine. I've used it on my '63 Gibson Kessel and have taken it off after the gig and not had any residual film or damage to the finish.
In my opinion, the plugs don't dampen enough.