How do I get pencil marks off white denim without wrecking the stitching?

Pencil smudges on white denim are a pain but usally fixable. I'd try a kneaded eraser first rather than a hard one - a regular pencil eraser can be too grabby on denim and you end up pushing the graphite around instead of lifting it. Kneaded ones are soft and you can press them into the weave gently. Work around the stitches, not over them, and keep the eraser clean by folding it often so you're not redepositing graphite. If that doesn't shift it, a white vinyl eraser used lightly with the weave, not against it, can work, but test on a hidden spot like inside the hem first. Water is risky with black and grey floss because even colourfast-looking thread can bleed a little on the first wash, especally if the denim itself isn't pre-washed and sheds dye. If you do ever get it damp, blot with a barely damp cloth rather than wetting the whole panel, and dry it fast with a towel so you don't get tide marks. Some people use artist fixative tricks or a white fabric marker touched up over the ghost lines, which honestly works well on white denim because the texture hides it. For the layout question, I did a whole back panel over about a year and wish I'd mapped it out roughly first. I just added pieces as the mood struck and ended up with a big motif dead centre and no room for the border idea I'd originally had. What I do now is sketch the whole panel on paper at actual size, place the finished pieces as I go with a light pencil outline of the empty zones, and keep a decent margin around the edges for a framing element later. Botanical pieces along the hem are a good call because you can extend them outward if space allows or keep them tight if it fills up, so they're flexible. A simple stem stitch vine with lazy daisy leaves goes quick compared to a bird and still looks deliberate.

Been there with graphite ghosts on a light jacket. What actually saved mine was rubbing the smudged areas with the sticky edge of masking tape, dabbing it over the marks and peeling it off. Lifted a surprising amount of the grey without any rubbing at all. Took patience but the denim stayed dry the whole time. For your next piece, skip the sketching altogether and trace your design onto the fabric with a chalk pencil or one of those white marking pens instead. I learned that lesson the hard way on a tote bag and never touched regular pencil to fabric again. Also for the layout question, I'd do a rough paper template like the other poster said, taping it to the back and standing in the mirror to eyeball it. Helps way more than you'd think.

For what it's worth, I stopped sketching directly on light fabric years ago after the same thing happened to me. Now I doodle my design on paper, then prick along the lines with a pin and pounce a bit of chalk dust thru the holes. Rubs right off with a soft brush and there's no graphite involved at all. Bit fiddly but worth it on white stuff.

On the layout, I'd defintely sort the big shapes first. I did a jacket once where I crowded everything towards the top and the bottom half looked empty forever. Do a rough paper mockup of the whole back, even just blobs, before you commit the next piece.

I have to push back on the kneaded eraser advice. Tried one on a smudged white canvas bag and it did basically nothing, it just glides over the high points of a twill weave while all the graphite sits down in the valleys between the ridges. A soft white eraser used with the weave acutally gets into the low spots. The kneaded ones are brilliant on smooth paper but denim is a diffrent animal. Also a tip for the layout worry, I photograph the jacket flat and sketch placement ideas over the photo on my tablet before committing to anything. Costs nothing and you can see how full the panel is getting.

For the layout side, I photograph the jacket flat, print it at actual size and cut paper shapes of my motifs, then shuffle them around on the printout before committing thread to anything. I've filled three jacket backs over about five years and the paper mockup saved me from the exact regret you're describing, because a design that looks balanced in your head often crowds the shoulder seams once you see it on the real shape. On the pencil problem, if the erasers fail, water soluble stabiliser is your friend for the next piece. Draw on that, stitch through it, then it dissolves away completely. No graphite anywhere near white denim.