I have never seen any appliquéd piece have wrinkles in it after you apply your fusible web, I guess it could happen but you seem to have a pretty large piece of fabric there that you could try it. Good luck and lesson learned!

I always cut off the selvage. That selvage shrinkage seems to be your problem. Cut off the selvage and wet the fabric again, let dry and reiron. It will be fine. Just relax and have fun!!

Thanks everyone so much! I had never heard of cutting off the selvage, but it definitely worked! I cut off the selvages, washed the fabric again, and starched and ironed it. This immediately got rid of 90% of the waves in the fabric! (And like other people have said, this won't be a problem for the smaller pieces I cut for the actual applique pieces!)

Thank you so much to everyone that replied!

If you are using fusible web ( like steam a seam or wonder under) you may not want to starch your material. Most of them don't want starch and ask you to perwash