After changing the bobbin, needle and rethreading twice I decided to give it away for the evening and try again later.
The next morning I woke up and remembered this post by Lolita Patterns on how to make a temporary straight stitch plate. Before reading this post I never even knew such a thing as a plate exclusively for straight stitching existed but now I do I'm wondering why all machines don't come with one...
Anyway as I do not have said plate for straight stitching - or any painters tape as was suggested in the post- I layered together some masking tape (for low tack) and cello tape (to add a bit more strength), and stuck it over the wide all-purpose (all stitch widths) hole on the throat plate.
AND guess what? It worked!!!! I was able to sew the whole hem around without any of the slightly stretchy synthetic dress fabric getting drawn down or gnarls of thread catching.
Yay for using something I read on a sewing blog within 2 weeks of reading it! Usually this sort of stuff gets saved in my "favourites" folder and never looked at again.
I think I might go back and check out some of those old saved post links...you never know what awesome nuggets of sewing information you may have stumbled upon while browsing the web.