Yes, good applique stitches are very very tiny. Mine are about 16 per inch, and I have seen one person who put a stitch in almost every thread of the fabric (a little overkill if you ask me, but she did win at the Houston Quilt Show)
But when you look at good applique, like these, you will see that there are no little points in the curves, leaves touch the pieces they are attached to, not seperated by the background fabric, and the outside points are sharp. The little stitches is one way to accomplish smooth curves.