Yes, that is pretty much right.
Your main thing you will want to be careful with is making sure you drill straight down, not at any slight angle. And don't wobble the drill around, which would make the hole bigger or weird shaped. You want a hole that is just the right size and a nice straight cylinder, not "wallered out" (legit technical machinist term).
When tapping, go slow and careful. Start carefully, again being sure to go in straight. The tap should be tapered at the front to help guide it straight. Go forward a little, back it out all the way, clean any chips or dust out of the hole and off of the tap, then put it back in and run it a little further forward. Repeat a few turns at a time, depending on how much trouble it's giving you. Use some kind of fluid, even just motor oil or wd40. Taps are easy to break, and hard to remove. And you only need to get this done once. No rushing.
With a brass fastener into cast brass threads and no huge flat base of contact with the bottom of the ballhead (or whatever), this thing probably isn't going to be ready to hold heavy long lenses. I would definitely do the 3/8 for strength. You could also consider something more
like this for your stud. But either way it will be pretty cool! It's a really nice looking tripod.