I'm in the process of doing a similar job myself. What started as a "simple" job of fabricating new teak stand-off blocks for the pad eyes to which the boarding ladder attaches midship on both sides.
Once I got the old ones off, it was clear that new backing plates were gonna be a necessity, since the through bolts were not even close to being straight.
For the backing plates, I bought some 3/16" plate from McMaster-Carr.
Long story short, I bought some 1/8" stainless from McMaster-Carr. I marked the outline and cut it a little proud with a hacksaw, then to final size on a bench grinder, using it very gently at the slowest speed to keep the steel from heating up. I drilled the bolt holes with a 1/2 VSR drill, using first a 1/8" then 1/4" cobalt bits.
Polishing definitely was the most time consuming part of the project. Starting with 100 grit paper, and progressing through 150 emery cloth, then silicon carbide wet/dry in 220, 320, 400, 600, 800, 1000, 1500 and finally 2000. Followed that with some white rouge on a buffer wheel on the bench grinder. Final step was to hit it with some Prism Polish. They are now sporting a mirror finish.
Here's what I learned:
1. If you don't mind investing a pretty sizable amount of time, this can be done with hand tools alone. A bastard file probably wouldn't have been too much slower than the bench grinder for truing up the edges.
2. When you drill the plate, use cobalt bits. Drill at a very slow speed with a pretty good amount of force on the drill. If you aren't seeing a nice little corkscrew of material coming out of the new hole, all you are doing is heating up the metal -- which will harden it even further. As long as you go slow, cutting oil isn't necessary. After the first couple of holes you'll get a feel for the right speed/pressure combo.
3. Unless you are looking for a dead-flat surface, use a DA or RO sander for the initial sanding. After that, wet sand with a small sanding block.
Of course, if Garhauer can do this for you at a reasonable price then it'll probably be the best money you spend this week.