Can you embroider lettering over a fill stitch?

Yes, you could, people do that all of the time. They do it on purpose if wanting to embroider on Towels or something deep and fuzzy sometimes, to smash all that fuzz down and make a nice smooth surface to embroider their letters onto. It would be harder to sew though though, denseness wise if the bottom fill area was really dense, and you have two layers of stitching, one on top of each other. If using fill stitch for the banner you don't want to use fill stitch too for the letters with both of them having the same exact stitch inclination though, as then the letters would tend to blend in with the same fill stitch inclination of the banner. So if using fill stitch for both, I would make the letters stitch inclination going in a different or opposite direction to make them then stand out and not sink into the fill stitch under them. Maybe a fill stitch for back of the banner with at least an outline perimeter underlay and satin stitch with some central underlay for the letters might work out good. Or if really small letters, don't even make them a filled in satin stitch at all, but make them of single running stitches instead. If letters kind of small, they do sew out better using an extra thin size 9 or 10 needle and extra thin, 60 weight embroidery thread over using a bigger more nornal needle size 12 or 14 needle or such and more normal 40 weight embroidery thread. Or you could even do the banner part by machine, and hand embroider in a hand back or outline stitch the letters more all by hand on top of it afterwards, with a hand held embroidery hoop, and just some hand embroidery thread too.