Yeah that's the way to do it, either have a system where you can drill right through the cylinder and plug the outside hole (then they'll be spot on) or calculate where they should go and make it as accurately as possible.
To get one to run on low pressure the bore sizes we're talking about are too small. Go for a bore and stroke of maybe 5/8". That way you get a bit more torque on the crankshaft and more force on the piston for a given pressure. A flywheel like you have is also important with the mass concentrated around the outside to give it a high moment of inertia and keep the thing turning over until the next power stroke.