No fear, this is by no means modern plumbing-
1. I need to cut at least two holes in my wall: one up high (water in) and one down low (water out). What advice do you have for making sure these wall holes are re-sealed around the cuts once the plumbing is run through it?
Use a hole-saw only the diameter of the pipe- if I were doing this, I would cut a square piece of cedar, say from a 1X6, put a piece of copper flashing over on edge, and bend it over the face 1/4" or so to make a drip edge- cut a hole for the pipe with the hole saw in the center, and then cut the 5.5X5.5" away from your siding, so the square with the hole in the middle is inset to you siding- nail, and caulk this in- put a similar piece of
wood on the inside- before you put either plate in or out- line the hole with vapor barrier which will be tacked under the "plates" inside and out, once the pipe goes through caulk around it in and out- this should require only a fine bead.
2. I don't want to flood the studio so I want a very safe overflow. Should I overflow the barrels down the drain or have a separate overflow pipe and hole through the wall? Am I correct in assuming the overflow pipe needs to be at least as wide as the inflow pipe so it doesn't fill faster than it can drain?
Do this just like a sink, drill a hole in the barrell 6" from the top and right at the bottom- connect the tub you have coming off the top hole to the one coming off the bottom so they exit the building through one hole. I would make the drain pipes larger than the fill, for the reason you cited. 45 degree jogs are better than 90 degree ones with gravity- and make sure you have a good cover (screen?) on the pipe coming in.