Help with "Brush" Texture blending quality/methods

I’m trying to create a bit of a 3D paint program where you can apply basic shapes, logos etc to a mesh and then save it out as a single texture file.

I know Decals can do this much prettier at runtime, but there is no way to bake them into a texture that I’ve been able to find.

I’ve gotten to this point below, where I can put a logo or custom image onto a mesh, and it warps around the curves of the mesh.
My main problem though, that I want to figure out before continuing development is improving the blending quality of the brush/stamp texture like a normal paint program.

As you can see, the logo ends up very pixelated with no real blending method. I have the vehicle texture at 4096x4096 which is plenty high enough resolution for a much clearer logo on the base texture.

Any idea what sort of settings or ways I can place this with less pixelation?