TIP: Read your machine's manual. There is a wealth of informative material there.
Before I explain the stitches it is important to know which presser foot to use. In figure 1 you see the top of three possible options. A and B are general feet. C is an appliqué foot, which does not have a bar in front. It is free of visual obstruction so you can see what is ahead of the needle and thus you can be more accurate when sewing a complicated piece.
We all know about the zig-zag stitch. It has been around for years. Shortening the stitch length will create a satin stitch (sort of), but it does not make a nice edge for appliqué. The reason is that each stitch is taken at an angle from the previous stitch. When I tried to shorten the stitch length to make the stitches closer together than in the photo, it gummed up under my presser foot, and I created a rat's nest on the back.
The satin stitch is designed and preset into some machines to create a closer, more regular stitch. The sequence of needle placement creates a stitch that is straight across first, then at an angle for the second stitch. I was able to shorten the stitch length by one increment, but no further. Still, it is shorter than the zig zag and looks tons better. The actual stitching is a scant 1/8 inch wide and looks really spiffy, although the enlarged view in the photo shows the minor imperfections, which are not noticeable in the actual stitching.
TIP: Test before using this stitch on your fine appliqué. Every machine is different.
When using the preset it is still possible to make adjustments to stitch length and width according to your needs and preferences. The preset is only a starting point for the correct stitch. My Viking machine has three presets: narrow, medium and wide.
Have fun with this useful stitch from your lexicon of decorative options.