There are many variables that go into welding in patch panels, and it starts with the basics of panel fitment. You want the panel to fit tightly to the opening cut out, with minimal, if any gap. The contour should closely match the adjacent panel to promote the "minimal gap" concept. In the interest of perhaps providing some guidance, I've made "notes" on some of your pictures to highlight areas of concern that I would be looking for in making a similar patch panel.
Although it is hard to tell in the picture, the red line simulates the contour of the panel when viewed from the side, which has a slight arc to it.
So when bending over a flange to form this profile, the flange will need to be stretched to provide this arc. This is the detail you were adding by slitting the flange to allow the patch to follow the contour. Where this is one method of providing this detail, there are other methods of stretching a flange that will not need the slits, and thus the welding of the slits. The better the patch fits before welding occurs, the easier the install will go.
Looking at the same area from the rear profile, you can see that there appear to be two consecutive arcs (green lines), and not a straight line bend as you have done.
This detail would make this fabrication a better candidate for hammer forming, and not the straight bend in the vise. Now, looking at the bend of your patch (blue line) and comparing to the bend of the adjacent panel (yellow line), you can see that the factory piece has a gradual radius on the bend (approx 1/4" radius) where yours is a tighter radius from using the vise.
Also, the factory part appears to be slightly more of an obtuse angle, where yours is closer to a 90 degree bend. By having a sharper angle on the patch, it will require a bit more grinding on the outside corner to better match the adjacent piece, which will give you thinner metal on the corner for a weak spot in an area that is very much structural in nature. I bring these factors up not to pick on your work (I've been through the same learning curve) but to hopefully show how a little more work in the fitment/fabrication part will make the welding in part about 90% easier.
For forming the (green line) arcs and contour (red line) on your patch, here is a thread where I posted a response for a gentleman trying to make some windsield corner repairs. Where his pictures are no longer visible, they were similar to what I showed in my post, only with much rust. The process should be similar to what you need to accomplish here, and will show the basics of how you can perform some shrinking/stretching of a flange to control the contour of the panel with simple hand tools.
http://www.ford-trucks.com/forums/896657-replacement-steel.html
You may want to lean toward hammer forming in fabricating this part. Probably the best tutorial I have seen online (and what convinced me I might have a chance at pulling off similar repairs) is found here on some Divco repairs/fabrications. (be sure to continue on to his links for "metalworking #2 and #3")
http://heritagesonline.homestead.com/metalworking.html
....or here is an inner tailgate repair I did on a 55 wagon that shows the hammerforming process as well....
http://www.jalopyjournal.com/forum/showthread.php?t=550803
Next, the welding. As others have stated, you have what appears to be what happens when the shielding cloud has been displaced by wind, for a weak, porous weld. If you were to look at the back side, I would surmise there would be no weld penetration at all. I would give this repair a year or two of road travel and you would start to see cracks forming at the joints of your weld. IMO you should cut out this repair and have another go at it.
For welder setup, I always suggest to practice on some scrap pieces (same thickness as you are using on the car) to insure the machine is properly adjusted to give you a full penetration weld for a structurally sound repair of the area. Here are some samples, front side of the repair and rear side to show weld penetration:
Lastly, you've likely already seen it, but we also have a thread here on GJ discussing welding in patch panels, a pretty good "training" resource....
http://www.garagejournal.com/forum/showthread.php?t=53534
