I thought the variegated thread would add interest but I think part of the problem was the towel was too thick and heavy for embossed.

I think you are correct and i also don't understand trapunto concept.

Designs made for trapunto give the quilt effect for quilted material or fleece, because they have a somooth surface, but not for terry cloth. Terry cloth needs the lacey fill more dense in order to secure the piles under the embroidered lacey fill and give you the contrast just with the "raised" piles not embroidered of the open place. In fact, if the design is appropriate for embossing the terry cloth, the more raised the piles are, the more beautiful and elegant the embroidered designs come out. Hope this helps.
DS

Just one more note:
Also, when embroidering embossed deigns on terry cloth, you won't have your design sunk in the cloth.
Now try embroidering this same design you did on the towel above on a quilt material or fleece, using the same color of the fabric, or one tone high or low the fabric color. You'll understand clearly what a difference it makes.