Personally, I wouldn't worry about those corners, they look fine, no-one will notice.
I 2nd this although I can understand how you feel about it. If you were really worried I suppose you could line the inside?
As for sewing the top and the bottom together (which I think I understand is what you want to do)...
Do you need to sew the two main pieces together? Could you just continue the black strap round the back of the lid and sew it to the bottom of the main pannier? Then you would only have to sew the straps on each part rather than try to sew both top and bottom together. This would mean you would probably have to unpick the strap on the top
. It might also mean that spray from the wheel in the wet could get thrown upwards under the overlapping top and into the bag I suppose. In which case you could add some more of your tent material as a bridge between the two parts, ie an extended hinge, and use the strap going round the back to hold the lid in the correct position when fastened. Hope you can understand what I'm trying to describe. It might make it easier to sew a thinner piece of fabric to each part rather than sew the two thicker parts together.
However overall, I am very impressed! It looks quite small. Is it for the front wheel? Have you done another for the other side? How are you going to fix them on the bike?
I made some (plastic) clips using a nylon 3D printed process for my old panniers a while back which were reasonably successful although not perfect.