Hello and welcome !

- side rails help keep the playfield from warping when you start adding elements the the top and bottom. They can get pretty heavy quickly.

- cut out holes can be what ever shape you need, however if you are left with little slivers of wood between then, just remove them so they don't break off in the future.

- AutoCAD works great to generate the flat .dxf files for machinig. Stern uses Solidworks for design I believe. Also for testing rules and some features, virtual pinball can be a good option.

- CNC cutting of the playfield is the way to go if you have access to one. While AutoCAD will generate the .dxf file, you'll still need CAM software to generate the tooling for the machine. I think solid works has this option ( plugin?)

The rails sit on top of the playfield and are fastened from the underside of the playfield. I believe they are usually 1/2", so that 22" wide playfield is actually closer to 21".