Kraft is fine if not coated. Most coatings are wax or poly and occasionally aqueous. While okay to store food in these coatings, I wouldn't experiement with cooking.
Brown paper that smalls funky when wet probably came from a recycle mill and is made of post consumer waste (the old corrugated containers you see bundled together behind wal mart). These are mostly FDA approved, but it's a different FDA rating than that given to virgin fiber. The furnish at some recycle mills is pretty suspect and I would't use it. If you see a lot of black and white specks in the sheet, it is probably recycled board.