I agree with Lynnie. I also do quite a bit of appliqué using the same method she does. As for appliqueing on the back of a quilt, I think it is fine. I made a quilt for my daughter for Christmas two years ago that was just a scrappy square type of design. Applique did not really fit into the pattern, but I wanted to personalize it, so I appliqued two little ferrets (because they have two ferrets) on the back and they LOVED it. It is really just another way to put your signature on a piece. As for quilting in the design itself, why not? I would just advise you to do that quilting before the sandwich is put together so it does not show up on the front.
There really are no rules to being artistic. Please post a picture when you are finished. ;-)