I would remove the plaster wherever the base hits the wall or a little lower. Replace that space with strips of wood or ply. Then float hot mud over it all to make it smooth. Then install base as you would normally. Why use a molding that is so small that the rugs hide most of it?That is definately not aesthetically pleasing. Why not use the larger moldings that are the fashion now? They are made from wood chips and are not that expensive.