For finite coupling lengths, terminated spatially coupled low-density parity-check (SC-LDPC) codes show a non-negligible rate-loss. In this paper, we investigate if this rate loss can be mitigated by tail-biting SC-LDPC codes in conjunction with iterative demapping of higher order modulation formats. Therefore, we examine the BP threshold of different coupled and uncoupled ensembles. A comparison between the decoding thresholds approximated by EXIT charts and the density evolution results of the coupled and uncoupled ensemble is given. We investigate the effect and potential of different labelings for such a set-up using per-bit EXIT curves, and exemplify the method for a 16-QAM system, e.g., using set partitioning labelings. A hybrid mapping is proposed, where different sub-blocks use different labelings in order to further optimize the decoding thresholds of tail-biting codes, while the computational complexity overhead through iterative demapping remains small.