and want
to put wood inside the jaws so it doesn't chew up the finish on the
furniture I'm working on.

Wilton sells fiber and rubber jaw liners that work well. They attach with
magnets and stay put pretty well.



what kind of drills should I use, and what should I watch out for?

I have drilled CI castings and I have always used normal drill bits.
Well, maybe not normal, there are Chicago Latrobe with split points.

I doubt you need anythings special for a small shallow hole.

My Darex manual mentions using 90 degree points and double angle drills
which I have not heard of before. Should I consider making a set
for CI use?

chuck