I actually had to go out to my car, pull a headrest, and probe around inside the hole to double-check this!
It has been nearly a year! 
Anyway, here's what I did: I wrapped the canvas/burlap over the springs only, but did wrap the fibre decking material over the top and the backside to just above where the cardboard strip of the cover slips into the groove. I wrapped the foam over the top where the headrests slip in, but it appears that I cut it flush with the rear edge along the top.
It sounds like you didn't wrap the fibre decking material (second layer) over the top, but this is no big deal. You can glue an extra strip across this area, and wrap it down to that groove if you wish, and it will help smooth out any funky edges within the seat frame -- don't worry about the gap between the spring deck and the frame. However, yes, try to wrap your foam over the top and cut it flush with the back edge. Cut some holes in it as well for your headrests to pass through.
I believe that the padding within the covers (the 1/2-inch foam with the cloth backing) will be enough to hide any sins/lumps/bumps from the rest of the seat frame at the rear below the headrests.
Give me a call at the shop tomorrow if this does not make sense!
Travis
