I kind of like the idea of a 5" pin. I've been doing that on a few balls lately; a few have the pin above the bridge, most have it below.
I don't think the Hyde flares a lot; so, I'm not sure a weight hole inside your PAP to reduce flare will do a lot of good. The 5" pin position will reduce flare in any case; that is mostly why they get decent length. To keep it less flippy (Hyde is not a flippy ball in general), you might edge the CG into the thumb positive quadrant slightly. a Weight hole there might add a little flare and help reduce the length.
On the other end of the spectrum, a 3"x5" drilling adds a sense of control and reduced backend, but might need some polish to get the required length (maybe not as much as 2000 grit you proposed above), depending on your release/delivery factors. I have an early rolling pearl, the Brunswick Red/Black Monster, drilled that way and it works great. A 2"x2" drilling might be too early and too mild a backend, again, a lot depends on your release/delivery and the oil pattern.
FYI recently I have tried placing the pin (on Columbia balls exactly between the finger holes & kicking the CG out 1/2" to 1.5". Worked great so far on several balls. You can do this with Columbia because the pin goes all the way through to the core. (At least it did on the 2 or 3 I've tried so far.) This gives me kind of a strong arc and no flip even with a Messenger Ti pearl. Thinking of trying it on a Messenger Traction and CrunchTime next.
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Bowling: Just like hand grenades and horse shoes, you only have to get close.
Life: Deal with what is.