So far, I have done all my applique projects with cotton on cotton. I do needle-turn with tracing, freezer paper and backbasting methods, Karen Kay Buckley's spray sizing with a template method, and fusible. With the KKB method, depending on the project, I hand stitch or machine stitched the pieces down. I use the same method for the whole project. With fusible, I machine stitch using either a blind hem stitch or a buttonhole stitch. I have a Hawaiian quilting block in progress, which I am needle turning. I find applique relaxing, I guess mainly because I look at each block as a mini-quilt, and a completed block is a completed project.
I have never worked with wool. I don't like the feel of wool, and most of the patterns I've seen are very folk artsy. I have never done buttonhole stitch by hand on an applique project. When I first learned to sew 50 years ago, my mom's machine had a straight stitch, forward and back. If you wanted buttonholes, you made them by hand. After hand stitching buttonholes for upteen blouses with cuffed sleeves, I'll pass on a buttonhole stitch.