The top is literally just stockinette and lace but I don't want lace around my hips...

Maybe a loose 1x1 ribbing

Garter would be pretty

I like a folded picot hem

Ohhhh folded picot!

I was thinking picot hem as well

I like folded picot as well but with that being lace weight on a 4 I would be afraid the join could get really tight.......I think I would do seed stitch.

To be honest.....where the lace is, people will be looking at your chest not your hips. I think the seed stitch would be subtle.

A folded hem.

Regular folded hem, that's probably what I'd do