I take a small amount of fabric glue add water and paint brush onto the fraying edge. Just the tiniest little bit or it will make the fabric too stiff. It acts as a fray check in a pinch. The fabric glue is permanant and will never wash out. You could cut the pattern down.
http://erinrussek.typepad.com/one-pi...lique-lessons/ Here's a link to all you ever need to know about applique. If you look through these she has a tip on those inside points. Theres a few videos and several tutorials. Good luck!