That method works fine. Just like in woodworking, its all about how you cut to the line. When you use a piece of cut material, you trace the outside as a template onto the area to be patched. You then cut to the INSIDE of the line, while leaving the traced outline. You can also do the inverse of this by cutting material off the jeep, then tracing onto your new sheet metal. Both ways work the same.
I've found any gap over 1/16" as being too time consuming to fill. Its faster and easier to cut a new patch. You will get better results with less heating with properly fit patches. Eastwood and others make little clamps to hold the material to butt weld.