I think the printable freezer paper is a red herring. What you really need to know is how to print on the fusible printable fabric, and I can't help you with that.
Here's the stuff that I have seen mentioned most often when it comes to printing designs on fabric:
http://www.dharmatrading.com/bjset.html
Basically you soak the fabric in Bubble Jet Set first to prepare it to take ink. Then you iron the fabric to paper-sized sheets of freezer paper (to give the fabric stability). You run the freezer-backed sheets of fabric through the printer to get your design, let the ink set for at least 30 minutes, then peel the fabric off the freezer paper and rinse it to get rid of any excess dye.
At this point you could do some machine embellishments of the design, provided they aren't too dimensional (like adding beads or satin stitch).
Next step would be to iron the fabric onto a fusible. Steam-a-Seam would be a good choice. You definitely want a fusible that says you can machine sew through it (a few are designed to stick so well the adhesive will gunk up a machine needle).
At this point I would cut out the design, fuse it to the background, finish the embellishments, and do any edge stitching desired (such as satin stitch or blind hem stitch).
I did a quick Google of your Avery product. I can't tell from the little bit I read whether the ink would be permanent. I also am not sure if you can iron it to freezer paper in order to send it through the printer (is it stiff like paper? if so, maybe it is designed to be sent through the printer on its own). What I'm not sure of is whether the freezer paper would peel off afterwards and still leave the fusible viable for attaching to background fabric.
I think if you start a new thread about printing on fabric and embellishing appliques, you might get more responses about how best to approach your project. Or, put the Avery product in the headline so someone who has used it already can help you with what you have.