Having a few problems with your directions.
As a bit of background, I'm building a keyless soprano saxophone (see screenshots). The toneholes are not cylindrical but are undercut (they flare out where the hole meets the instrument's bore). Hence the solid I'm trying to model to subtract.
I'm using VW2014.
Working through your directions:
(a) The project tool doesn't seem to project a circular surface (red).
(b) The bore is not cylindrical so I've made a tapered arch. Now the project tool doesn't work at all.
© I managed to create a lower surface (red) from tapered arch. Surfaces refuse to fillet.
(d), (e) and (f) Extracting lower edge is again not circular in plan view resulting in a misaligned solid.
Really appreciate your time and understanding.