This is great, I turn to the claw hammer at the house for everything. Again, I'm glad to see this repair demonstrated. It looks to me like you're doing fine. Them pics are kinda small though, lol. I learned my lesson about showing fresh welds on the interweb. People don't get it.
Spray bottle some water onto cardboard to block off the sparks. By all means yes, get that rust off the tower and coat all the bare metal that will be hidden behind the brace. If you really want to knock the rust off without hurting the metal too bad, you need some sandpaper or something like a scotch brite wheel from the drill bit store maybe? Don't want to thin that tower metal any more than necessary.
Cutting the hole-
Cut a triangle instead? You da boss. Or you could drill a series of holes with your small bit real close together. Perforate a circle, then knock that out.
