Iron on interfacing is used to INTERFACE. Generally collar, cuffs, button holes and buttons, around the neckline... Anywhere you need added support.
For instance, you cut out 2 collar pieces plus one piece of interfacing. Remove most of the seam area from the interfacing, iron it on to one collar piece, and then proceed to put together the collar. The interfacing ends up not showing at all because it is inside the garment. And, when you think about it, it is actually sewn on as well.
So, unfortunately, you are probably not using it in the way it is intended, and it is always intended to be sewn in. That said, it can be rather tricky to get iron on interfacing to properly iron on. Instructions must be followed, otherwise it unsticks fairly quickly.
A good sewing alternations blog is
http://geniecentre.com/ (lots of free stuff)
Workpants - I would have patched with similar fabric (from an old pair of workpants?). Fraying collar - cut another collar piece and attach it right side to right side of the front of the collar, with a very small seam, fold it out, and hand sew to the bottom at the back. Will make the collar slightly smaller. Elbow - patch with leather, a similar fabric or something completely different (both elbows), to make a feature of it.