This part might seem confusing but your just quilting the hot pad. Start right in the center of your fabric and stitch a line (about one inch). With your needle down in the fabric lift your presser foot and turn your fabric (put your presser foot back down) and sew another line. Again stop and turn your fabric each time your line of stitches will be getting a little longer as you make your way from the middle to outer area of the hot pad. This does not need to be perfect, it is fine if the spaces between your lines are not exact.
And stitch the pinned strips all in place.