1 - I would drill the holes now. Drilling after the collar is on makes a mess of wood shaving inside the keezer.
2 - I used plain ol' styro-foam and glued it to the inside of my collar/lid. I removed my lid comletely. Used 1x8 for the collar, 7/16 waferboard for the top. The top is screwed to the freezer hinges and is still light enough to stay open on its own. This allows me to be at the freezer height to lift kegs in, instead of freezer height plus collar.
3 - I caulked all the joints in the lid. I have 3/4" weather stripping on the bottom of the lid where it contacts the freezer.
Here is a picture