it would be easier to just outline embroidery it or to use a perm marker to draw it on. But I love the idea of appliquing the crazy fabric... I would use some fusable webbing and iron the " patch" on. Then as "* Holice* sez..... satin stitch around it.. then I would go back with a tiny zigzag or tiny satin stitch to hightlight and draw in the expression and details.
Can't wait to hear the story!