I'm doing a BOM at my LQS and last month the tutorial was on this method. However, I'm confused with your reference to '
how a glue stick would work instead of the tiny drops of glue' 
.
In her method, she simply added a 1/4" seam allowance to the piece and ironed the edges over. Once it was stitched mostly in place, you remove the freezer paper. She also suggested one method of doing this was to cut a small hole in the backing fabric and tease it out that way (looked a lot of work to me, but I machine appliqué, lol).
With regard to the silk thread, it's been my experience that silk virtually 'disappears' into the fabric and is almost unnoticeable. You may find that one blue, mid way between the two colours will be fine. Good luck!
