i would pick them out and fix them. I don't think you will ever be happy with it if you don't. I will be a lot of extra work but in the end you will be happier with it. There are a couple of quilts in my cabinet that have never been finished because of the same kind of issues. Every year I think that I will either fix them or finish them the way they are and donate them to the homeless shelter. They won't care if it doesn't meet my standards they will just be happy to have a warm quilt. Hugs to you and I know you will make the right decision. The applique over them is a great idea. Good luck and let us know what you decide.