I recently appliqued this towel for my daughter and it was surprisingly simple.
I chose a font from 'Word' (this one is Cooper Standard Black, of course, you could choose any font from any application). Then I sized it for the towel and printed it (in black outline to save ink!).
I cut out the paper letters and traced them onto my chosen fabrics, ironed some double sided fusible webbing onto the back of the fabric and then cut out the letters.
I ironed the letters onto the towel and then stitched around the outside of the letters in a small tight zig-zag stitch. This was probably the most difficult or fiddly part and would also depend a lot on the font you chose.
I have not done much machine applique work before - but the fusible webbing makes the process so simple. With all the beautiful fabrics around - as they say - the only limit is your imagination.