[Zeke]

Stepped drill bits work exceptionally well on thin stock. Using one repeatedly in 1/4" steel and it will get hot. If you use a stepped DB use the stop on the quill to stop at the correct depth.

I'd drill an 1/8th" pilot hole and then use a high quality HSS bit. Coated ones are nice but having the core material of highest quality makes drilling mild steel like buttering bread.

Cutting fluids are more important than you think. Most use any old oil they have. What you are doing there is lubricating the friction which is what oil is supposed to do. The worst oil is a good synthetic because it really 'prevents' friction. Use cutting oil instead