Oh my...I do machine embroidery with my Pfaff 7570 and believe me I am no expert but manage to do quite nicely.
What they did was terrible and I can't believe they would have returned it to you that way. Not using the correct stabilizer nor hooping correctly seems to be the main cause for the problems created. You should not have paid for this work and made them fix it correctly. I can't imagine any business putting out and expecting payment for this type of work. I am so sorry this happened to you but you need to stand up for yourself and let them know how unhappy you are with their work.