I think some people do the quilting before adding the applique, while others add the applique before doing the quilting. I, personally, have always applied the applique to the quilt top before creating the sandwich and doing the quilting. Sue Bleiweiss, however, sandwiches the backing, batting and background fabric and does the background quilting, then fuses on the appliques and uses the quilting to hold them down. With this technique, as you mention, you will see the applique quilting overlapping the background quilting on the back. I don't think Sue worries about this and she does win awards. I think you can do it whichever way appeals to you.