@Chasboy1
I agree that it is best to go with the recommended drill size.
If you try to go a little smaller you run the risk of splitting the blank when you insert the tube (if you have to force the tube in).
In addition, if you make the hole smaller, there will be less glue between the tube and the blank ... a problem if you make the hole TOO small.
If you go larger then you run the risk of the brass tube not being properly aligned with the axis of the blank.
It is sometimes possible to get a "better" fit of the tube in the blank by playing around with alternative size drills, but it's risky.
The thing is that the final fit of the tube into the blank depends slightly on the blank material (e.g. wood or "acrylic") no matter what drill you use.
That's because all materials have elasticity; they do expand when the drill goes in; they shrink back a little when the drill comes out.
To some extent, the recommended drill size is a compromise because the "recommender" does not know the material you want to use.
If you want to play around with the hole size then you really need to buy a range of drill sizes to try out; and that's going to cost you more.
With regard to the 'penmakers drill letter size "O"' (quoted from your post) .... there are so-called penmakers drills on the market, but don't buy them.
When I began turning pens I bought a few. . They have a slightly different spiral twist pattern, and may be a bit longer than standard machine drills.
But I did not find that they made any real difference to the drilling process .... in my opinion.
So I would just buy "jobber" drills from a machine tool store in the specified sizes. . Drills from Walmart, Home Depot, etc., are also OK.
But machine tool stores will stock a greater range of sizes and get you exactly the recommended size.
An "O-size" drill will be of the right diameter whatever type of drill you buy .... jobber or penturners or stubby or whatever.
To answer your question .... "Is the letter size the same as the more common letter sized drills?" .... the answer is YES.
Here is a link to help you compare drill sizes among the standard SAE, metric, and letter sizes ..... just for your reference, nothing else :-
This table is the chart for converting and identifying various drill bit sizes.
www.csgnetwork.com
As I said, I recommend that you just go with the recommended sizes to keep life simple and avoid unnecessary costs.