How big do you want the inside diameter of your finished hole to be?

figure that out, and work backwards from that measurement.

Let's say you want a hole that is 1 inch in diameter, and surrounded by a donut shaped wood reinforcement. First make the donut about 2 inches in diameter. You can probably use a 2 1/8 hole cutting drill in a drill press. Normally these types of tools are sized based on the diameter of the hole that they make. The part you want will be that size minus the "kerf", or the area of wood removed by the teeth on that hole drill, and also minus any aditional wood you remove by sanding the piece smooth.

take your circle to your boat and position it where you want it mounted. Use a pencil and lightly trace the outside of the circle, and the center. ( You should have a hole about 1/4 inch diameter in the middle of your circle from the guide drill for the hole cutting drill. Stick a pencil in that and you should be able to mark the exact center of your circle on your boat.)

After cutting the outside, clamp the circle to the drill press table, and change to a 1 inch bit for removing the center, and creating the "donut". This should leave a ring about 1/2 inch thick surrounding the hole.

Now go back to your boat and use a 2 inch diameter hole drill to make a hole for mounting this donut. The wood is thin so don't push hard. Let the tool do the work, and try to keep it as straight as possible.

Clean up the edges of the hole with some sandpaper, or a drum sander chucked into your electric drill. You should have a fairly close fit and not need any filler to hold the "donut" in place, but a little sawdust in the epoxy will thicken it if necessary. After the epoxy sets up you can use a rasp to ease the edges of the hole in the donut, or you can use a rounding over bit in a router.

If you want a larger hole, then your "donut" should be appropriately oversized so you allow enough wood around that hole for sufficient strength.

hope this helps.

PGJ