Since this is a BOM, I would notify the provider that the background fabric is skimpy and ask that it be cut larger. I haven't done a lot of applique, but I do cut my squares at least 1" larger all around, and especially on a large block like that. Your work is beautiful! If the provider doesn't provide bigger background pieces in the future, you might consider using your own background. You're doing too much work to have the pieces coming out too small.