I would use it for appliqué after washing ( in hot water, with detergent, cold rinse- hot dryer) then the wool if ready to be cut & stitched anyway you would like. Visit Primitive Gatherings; Sue Spargo; Wool Works; Missie Carpenter. There are many more ( wool quilting) places, those are ones I turn to often. Once there check out more of their links if you would like. Also if you (Pinterest) just search --wool Quilts. Tons of inspiration.
Heres a couple of my wool quilt projects.