Hold the pencil sideways so the greatest area of the tip is in contact with the paper. This position allows you the control to lay down a very light base of color which you can then layer on top of until you have achieved the desired hue. It also allows for smooth color and minimizes unsightly lines.
Paint in the design as desired. If you are using acrylic or other opaque paints, they will most likely cover any detail lines within an area. You can either try to paint around the lines or go back and re_trace or freehand them later. When the paint has dried, place a piece of scrap fabric over it and heat set with an iron.