I am not experienced per se but been out a while so I'll try to answer your question.
If I may, try checking the drill charts at the library ( http://www.penturners.org/forum/topic.asp?TOPIC_ID=14937 )
I believe you can use 1/2" in lieu of the 12.5 mm
Not sure if you mean squaring the sides of the blanks or squaring the ends.
If you mean squaring the sides, I use a bandsaw or sander. I rarely need to do that though and drill even rounded branch sometimes.
If you mean squaring the ends, I use an end mill. Just make a shim to fit the bigger tubes. The shims I use are just regular wood drilled and tubes with the 7mm tubes. I then turn them to fit the bigger tubes. I have a lot made for different sizes.
Note that if your shim is not perfect (i.e. one side is thicker than some) it will reflect on your milling and may cause ill fitted pens, so take time to make them right.
Hope this helps.