I'm not a fan of raw edge with anything that gets washed--although your method of sewing it down sounds great. (I like Bottom line too, although I also find Superior's monopoly works well and is not stiff) A friend has used Misty Fuse to hold down the applique piece but not brought it all the way to the edge--she turns under the edge, irons the piece with Misty Fuse on the center back and then machine stitches around the edge of the turned edge--hope that makes sense---looks like turned edge, holds in place well and like you, you can't see her machine stitches either.