Becky, I may have missed the part about the machine applique, so let me give you another tip. If you are using a blind hem stitch, put a piece of paper under your work to act as a tear away stabilizer. I just use my copy paper. It is much cheaper than tear away stabilizer, yet gives you the same smooth finish. Tie your thread knots then just rip. I discovered this when doing a sunbonnet sue quilt.
Good luck with your project! You have a safe and pieceful Christmas! Happy stitching :D