Yes, I glued the whole insert area, but the seat was small, and the insert area is only 11" wide.
You won't need any more smoothing to the foam, it's almost perfect. You only need to glue the seat cover along the line where the dip is in the front. I would put some dacron wrap over the front section in front of the glue line, and over the rear section in back of the glue line. The dacron fiberfill wrap lets the seat cover slip so it goes on easier, and adds a little padding under the seat cover to fill out the edges and corners. You can staple the dacron to the wood frame.
Windlace around the perimeter might be a little too big, but some welt around the perimeter of the wood frame will really dress it up and finish it off nicely. Another thing you can use is hidem welt. It comes in a lot of colors to match the fabric you use. Here's what it looks like:
CLICK HERE You staple it in the middle, and the staples are hidden. Or, you can make some double welt or sew your own type of trim strip and glue it on.