I have done quite a bit of felted wool applique (not woolfelt) and I would definately not use a hoop. Wool is very stretchy and although it is "forgiving", it doesn't forgive stretching very easily!
When I have had to applique large pieces of wool, and am worried about the pieces lying flat enough, I lay the background out on the dining room table and put the appliques down on it. I always baste the appliques in place with a big running stitch.
I hope you enjoy doing it. I love it - it's addictive. I went from felting fabrics myself (prowled around at the local Sally Army store for wool clothing, after raiding our closets) to buying undyed fabrics and dying them myself, which is really fun...I am working on one now - hand-dyed and appliqued and embroidered with perle silk - so lovely to use.