My bird quilt in my profile is machine embroidered, and then fmq all around each design. Yes, I treated the embroidery like an applique and stitched tightly around the design. I learned partway through this project that it would be better to machine embroider through the top and batting and put the backing on later. Machine embroidery is not pretty on the back. Echoing can still be done as part of the quilting process.
Another way to use machine embroidery is with open quilting designs, just for quilting. It's a lot of loading of the quilt on a DSM, but I learned to use Clover clips to attach the quilt to the embroidery hoop. This was a lot of work, but the effect was pretty amazing. In the end, I'd rather just fmq.