I like the small pieces for applique when I want it to have a 3-D look to it. Also like the idea of QAYG. I was told the same as others have mentioned, overlap the edges then do a nice clean cut through both layers then whip stitch together (teacher at the LQS told me this).
I would worry about the fusible not holding through multiple washings - like a baby quilt gets multiple washings. My step mother made a cute little quilt for my oldest and every time I washed it I had to repair it before giving it back to him.