I've done several quilts with a lot of applique on them. I prefer to machine stitch, raw edge, by using Pellon 805 Wonder-Under which is paper backed fusible. I trace my designs on the wonder under, iron it to my applique fabric, cut it out, iron it to my block (or other area), blanket stitch around it all... they turn out great, wear well, etc.
Certainly try a couple of different methods (make mug rugs with your examples) to find the one that works the best for you!