How to paint rough but distinguishable people with oil paints?
There are a few things to consider, that I can think of at the moment:


This merging with the background and the blobs are actually the charm of the technique. You either learn to use it to your advantage or find a technique that serves your means better. (You can mix techniques, too, of course.)
Generally speaking, wet-on-wet works better on larger scale canvases because of the smudge-like nature of the technique.
For applying paint in detailed manner get a fine brush, either flat of pointed. The ones I'm referring to are actually not meant to be used for oil (I think) but they work fine with it (as long as they are not the ones with ultra-soft bristles; all brushes for oil need to be fairly stiff). You will still have some mearging with the background, though.
You can add fine details to your painting without the merging by letting the layer you've painted dry a bit and then paint on top (but this is not wet-on-wet).