[tsubaki]

Freehand and whatever sealant you like (did the neighbors in 5200).
Pilot hole so you don't break off the bit in the hole saw.
Use the same size saw as the rodholder, it will wobble and be larger than the measured size, besides you will waller out the edges to get the best fit.
If you don't already have a holesaw or kit, for only a few holes the cheap ones will work (Harbor Freight, etc), this is actually preferable cause they are sharp and dispensable. Only negetive part of the cheap ones, the throat of the saw is too shallow and you most likely will have to dig out some material in order to complete the hole drilled.