Fusing Plastic Bags: Turn up the Heat!
You started out low... now you see that plastic aint fuzin' so it's time to turn it up! Use your discretion but don't jump past the "Nylon" setting until you've already tried everything below that.
P.S. The reason I say this is that Nylon is plastic... thicker, woven plastic meant to melt at high temps. This is why it's usually one of the lowest settings on the iron.