1, a hole saw does not cost $280 unless you are buy a high quality set.
2, you never drill steal at high speeds. A 2" hole saw should never run any higher then 100 RPM'S. And you do not need cutting oil. You are better off using no coolant then subjecting the cutting tool to repeated heating and cooling cycles. Again slow speeds, speed creates heat and heat is your enemy.
3, you do not need to tape off metal, Wood yes metal no.
4, use a good primer with 2 coats! Then a top coat of any kind of touch up automotive paint. Let dry over night then install the connector.
Have you looked at the back side of the bumper? The reason I ask is on Ram's anyway the hole is already in the bumper. You only have to knock out the plastic tab if your truck was not ordered with the factory connector. GM might be the same.
Don