I get many embroidery and appliqued quilts brought to me to quilt. I always try to stay "off" both--but do a close line of stitching around the applique, then will echo that about 1/4-1/2" out so that the applique stands out from the rest of the quilting. Wavy cross hatching does eliminate lots of marking. If you plan to do a fill (pebbles, small swirls, McTavishing, straight lines, cross hatching, stippeling, etc) around the applique, I'd suggest you either use two bats for the quilt (which might make it awkward under the needle) or just place some extra bat behind the applique ( just baste in place with edges extending into where the fill will be) and it will really pop! (faux trapunto). Very pretty quilt!