I agree about the knit picker...I have several, even carry one in my purse. You will love it.
I like the idea of applique as well. They would really be cute if you place them so they look like they are coming out of the (frame).
Depending on the fabric (if you have any left over) you could use that and maybe put a small button on the appliques for a bit more interest.
Another suggestion I did not see anyone post, is if you have some more of the binding material left, cut the snagged part out and sew the new piece in. Of course you would want a pretty long piece to keep it from looking like you are covering up an error.
You are so sweet to take on this task for her.
Maybe you can post a picture when you are finished.