use a lightweight fusable- like steam a seam lite- or heat n bond light- the heavier ones are not made to be sewn- and will gum up your needle-
the fusable should be enough stablizer-
any stitch you like the look of can be used- some people just straight stitch just inside (i don't have too good of luck with that one) a blanket stitch is good- so is a small zig-zag-
some people who have decorative stitches on their machines use one of them...a satin stitch is a heavier stitch- will give definite (definition) to each piece- so make a little practice block- and try out different stitches around a circle- or some curved shape- and see what you like- they are all fine to use- and just a personal preference.