Thank you so much for your help, Shelby2000 and JenniCA!
JenniCA, do you add spray adhesive to keep the applique in place until you can stitch and iron the fabric down? You are so right, the spray is only temporary so when it's washed is when it gets those tiny wrinkles. I'll be heading to the fabric store as soon as the little one wakes up. I have to get some heat and bond adhesive!
Thanks for helping me out!
Shelby2000, thanks for the link for the sew forum. I will have to take a look at that site!