Beginner's questions - Blend / Strategy for assembling two pieces

 From:  ClosedCircuit
6656.1 
I'm trying to connect two pieces:


The two pieces are in close proximity but they don't touch. I thought that I could use blend (along the lines of the example found in the excellent help file), but the result is completely messed up.


I tried to move the squarish piece so that it would share an edge with the main body and use Fillet, but it couldn't calculate a solution. I also tried Lofting, and it worked after a fashion but the result was not terribly nice to look at...

I suspect that this has something to do with the complexity of the shape, but I'm not sure exactly what. How should I proceed next? Also, what's the best strategy to follow when trying to assemble two pieces like the ones in my model?

Thanks!

Phil