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that thing on the bottom is called a hole saw. they're the best for making perfect circles. I second the "jig saw" theory. they're much better than trying to use a dremel to cut metal. I have this model: https://www.sharkyforums.com/images/.../2002/09/1.gif
it's awesome, just get some good metal cutting blades for it and you're set.
Sabre saw's pretty much the same thing as a jigsaw. The Sabre saw I used worked well. The dremel's a great tool though. It works for everything you need. Metal cut-off wheels for cutting the metal itself, sanding drums for sanding it down, wire polishing wheels to smooth it out further, cotton wheels to clean all the debris up plus the drill bits to drill your holes.
the construction list:
drill press
hole saw (many sizes 1" to 120mm)
drill bits(again many sizes)
jig saw
dremel
lots of bits for dremel
i like the dremel for every small job like buffing, smoothing small cuts
everything else is done with the rest of the list
I used a dremel to cut a hole in my case and it worked great. If you are careful and use a compass to draw a circle on there first then there is nothing to worry about.