I watched half the video.
I use freezer paper method but leave it on. I don't understand why you would cut it and then trace about it and remove it. If I am working with a small piece, I would trace directly onto the fabric.
I use the threads mentioned YLI silk 100wt and Mettler 60 or 50.
I am relearning hand embroidery and have not had any problems with DMC floss. I wouldn't recommend it for applique, unless someone is doing a blanket stitch or a stitch they want visible.