I'm doing this right now. I have my focus fabric right side up, the interfacing is wrong side down with the shapes drawn on the back. So I sewing through the interfacing looking at the right side of my focus fabric.
I'm using a tiny stitch to follow my desired shape. When I grade and trim my seam and fix my seam, the interfacing will be down to position the focus fabric to the background, leaving a bit of puff to the applique. Quite often I do lightly stuff but not this time, but I still like that puff better than then squished look for this project. I press and then buttonhole stitch around the entire applique.