My hands would be shaking too much to get the bit into the router, if I were working on a piece of history like that. What you suggest might be the best approach, but there might be better solutions to that part of the project.
Do this first, (and I have no commercial interest in this restoration guy's business) it won't cost you a nickel. E-mail a few pics to this
guy and ask him for a brief phone consultation on your project, before you get into anything that might impact your instrument or its value. Send him the pics and follow-up by phone. He'll give you his thoughts, no-charge. Guys send him old Fender from all over the world, with similar challenges to yours.
tim@superiorguitar.com <tim@superiorguitar.com>