Which pattern are you following? Faggot lace patterns are basic lace patterns and it’s my understanding that there are several in this category. The patterns are comprised of a yo and a decrease, but this can be implemented in a few ways, which one are you using?
Hmmm… I wonder if trying a looser gauge would help. It’s a pretty wild guess on my part, but it seems like the problem might be that the fabric is just knit too densely. Maybe you could try bigger needles to see whether that gives you a lacier effect.
I usually use Annie Modesitt’s slip st edging for my scarves (as seen in the Alison scarf that’s found here) which is: Right side: K1, si1wyif (slip 1 stitch with yarn in front), k1 Wrong side: sl1wyif, k1, sl1wyif…this makes a beautiful, straight edging on a scarf, you just need to cast on an additional 6 sts to whatever pattern you choose to use.
If you don’t want to use this method, then slipping the 1st st of each row purlwise also creates a smooth edge.