How exactly should the hole in the machine be made. Do you just use a standard drill bit on the base of the glass bottle?

no you have to buy one for glass and be careful.

I had two battles shattered into peaces while I was trying to make a hole. These were little wine battles and they are as I found out not good for it because of very tiny glass.

https://www.dmt-nexus.me...aspx?g=posts&t=28951

This should help.
Also this
https://www.dmt-nexus.me...aspx?g=posts&t=35040

This is probably not the best way, but it worked for me. A rubber mallet and a nail. Took a couple tries but it worked. Rubber mallet is key. It softens the blows a bit, but a drill bit sounds ideal. Unfortunately, we couldn't get the Machine to work itself, but it was still a fun project.