I used a box cutter to cut my cladding. I felt that I had better control that way. You should see some of the results of my Dremel cuts

Yes, the tube bumper should be removed to cut the center section out. It'll only take a couple of minutes & will make the cut MUCH easier.

I didn't do the wiring when I did the hitch install because I just leave it coiled in the jack stowage compartment when not in use. I just run it out under the door when I need it.

Go out and purchase a new drill bit for your install. It'll cut an hour off of the install time from my experience.