Tired of junk thermostats. Going with NOS. Do I need to drill a hole in in?

Photos in the FSM are not necessarily 100% representative of real-life parts. Look at your new thermostat carefully; sometimes there's a small hole on the flange plate, or sometimes there's a very small notch in the valve disc. Either of those features should go at the 12:00 position. If neither feature exists, install it anyway, without drilling holes.

If you insist on drilling a hole, "small" means SMALL. Like, 3/32" is plenty. 1/4" is way too big; that's known as a drill-to-order stuck-open thermostat.