I would use Edyta Sitar's applique method with a teeny tiny zigzag stitch. Make a sample for your machine. I did one of her quilts and loved doing this method. Mine went like this: Tension = between 0 & 1-- Width = 1.5 -- Length = 1.0 - The stitch should just show a little of the zig zag very very small stitches (not a satin stitch) and it is very fine. You have to experiment. You applique entirely inside the very edge of your figures that you are appliqueing and with the blanket stitch the middle section of the stitch would be outside the design. I think that around the family figures especially, you would need an invisible stitch. Edyta also uses invisible thread. (Just my opinion.) The main question answer--you definitely need to quilt it. I see some frays on the picture already just from handling it. This is a gorgeous piece and you did a super job so far. I even looked up where you got it--absolutely love it. Good Luck!