It turns out that the problems I described in my original question can all be resolved by using the legendflex and hatchfill2 packages.
Here's an extension of my original code, and the picture that it generates.
clear all;close all
%parameters of the first patch object
obj(1).X = 1 + [0, 0 , 1 , 1 ];
obj(1).Y = 1 + [0, 1 , 1 , 0 ];
obj(1).FaceColor = 'b';
obj(1).FaceAlpha = 0.2;
HatchColor{1} = [0.4,0.4,0.4];
HatchAngle{1} = 20;
HatchType{1} = 'single';
HatchDensity{1} = 20;
%Parameters of the first patch object
obj(2).X = 0.5*[0, 0 , 1 , 1 ];
obj(2).Y = 0.5*[0, 1 , 1 , 0 ];
obj(2).FaceColor = 'g';
obj(2).FaceAlpha = 0.2;
HatchColor{2} = [1,0,0];
HatchAngle{2} = 20;
HatchDensity{2} = 10;
HatchType{2} = 'cross';
%make the patches
for ii=1:2;
h(ii) = patch(obj(ii));
end;
%hatch the patches
for ii=1:2;
hHatch(ii) = hatchfill2(h(ii),HatchType{ii},...
'HatchAngle',HatchAngle{ii},...
'HatchDensity',HatchDensity{ii},...
'HatchColor',HatchColor{ii});
end;
%Make the legend
Legend = {'blue square','green square'};
[legend_h,object_h,plot_h,text_str] = legendflex(h,Legend,...
'anchor',{'se','se'},...
'buffer',[-90, 60 ],...
'fontSize',20);
%object_h is the handle for the lines, patches and text objects
%hatch the legend patches to match the patches
for ii=1:2;
hHatch(ii+2) = hatchfill2(object_h(ii+2),HatchType{ii}, ...
'HatchAngle',HatchAngle{ii},...
'HatchDensity',HatchDensity{ii},...
'HatchColor',HatchColor{ii});
end;
%I couldn't use hatchfill2 to set the FaceAlpha's so I did it manually
for ii= 1:2
object_h(ii+2).FaceAlpha = obj(ii).FaceAlpha;
end;