Interesting challenge. Here are some thoughts:
- If you go with a regular hole saw with a block of wood inside the hull, pre-drill the 1/4 pilot hole. Then turn the pilot bit around in the hole saw so the smooth part of the drill bit rides in the pre-drilled pilot hole. This will give you minimal wandering.
- The oops arbor looks interesting. I would think the slower turning drill you could find the better. A powerful slow turning 1/2 drill would probably work out better than a fast 3/8 rechargeable jobby
- The other way to get a nice round hole is to make a template and then use a router with a collar to "trace" around the template. But the odds are low you could easily clamp a piece of wood on the inside or the outside of the hull for this to work.