Changing from gas pipe to drill rod won't make any difference at all. You'll still get flexing. Anyone here who's built a machine with unsupported rails will tell you that they flex. You won't gain any accuracy, you'll just spend more money. And you'll be building a better machine when you're done anyway, so why spend the extra money.
And servos on a machine like that will be a waste of money. Steppers will give identical performance and accuracy for probably 1/4th the price of servos.
If you want a better machine than the stock design, go with a better design. 5 years ago John's designs were about all that was available. But if you spend some time reading through the threads here, you'll see that no one here is building them. I honestly haven't seen anyone on this forum build one of John's designs for several years. There are better, free plans available here and elsewhere. Not knocking John's plans, or designs. He's done a tremendous amount for Hobby CNC. But I think his primary goal is to build a machine cheap, and easily. Not necessarily heavy duty or high precision.
As for the spindle, you might want to look at a Bosch Colt. A little bit bigger than a laminate trimmer, but smaller than a standard router. And variable speed, too.