Your comment about square holes reminded me that I had seen a drill that would make square holes. Professor Google found the examples and I remembered mortising bits so I had to show what I found.
Don't think they come in really small sizes, but Lee Valley has a 1/4" mortising bit. The notepad I'm working on has 3/16" square holes - close but no cigar. Maybe a larger notepad could use 1.4" holes.
Jim