4. looking through my drill bits...I have a 1/4 inch cobalt bit that looks perfect. 9/32 looks too small. I see the "proper" bit to tap a hole for 5/16 bolt is listed as a "type f" (bastards) no width listed.
17/64 is acceptable per Milodon for the 5/16 bolts so in theory 3/64 short of the bolt size may be enough for the thread height but that would be worth a looksey on a thread rolling chart.
Oh yeah, about the stretched chains (actually more of a wearing set of cogs) not introducing timing variations, they do whip and they do look like eggs when they are running. I have seen it too, you rev the motor and the crank sure does pull the cam along, but when you let off, watch the chain deflect in the other direction and at a steady fast idle, you can see a bowed chain on both sides. This was on a B with an electric fuel pump, no tensioner available yet. We saw it on a Pete Jackson too, but the idler would rock back and forth on power and deceleration. Im sure we could have logged the minute timing variation on a dyno chart but you could see it when you were on the timing light. Belt would be pretty slick on a B/RB if you run a remote water pump. Run what you want, "in spec" is better than "out of spec" in almost everything.