I'm not sure why you want a blind hole in your bolster. To me, it seems to just make things harder to do.
My method is to determine where I want the hole to be in the lockplate bolster. Then I remove the hammer/cock, the bridle, spring etc.
I then drill this hole thru the lock plate and the bolster with the TAP DRILL.
When locating this lock screw hole in the bolster/lock, try to keep it as far aft as you can while keeping some bolster material around it. In other words, the
center of the hole should be at least 1/8 inch from any of the edges of the bolster if the screw is a #10. It can be slightly closer if it is a #8 screw.
Then, putting the lock into the mortice in the stock and again, using the tap drill I use the hole in the lock as a guide and drill thru the stock to the far side.
In a sense, you are using the pre drilled hole as a custom drill jig when you do this.
Remove the lockplate from the wood and then enlarge the hole in the wood with a drill just slightly larger than the bolt threads. This will provide a clearance size with the bolt and form the hole that will guide the tap squarely into the lockplate.
(Note: At this stage, you might want to install the barrel and drill the oversize hole thru the back of the breech plug. It has a way of getting in the way of the lock bolt if you forget to do this. After the hole is drilled in the barrel, remove the barrel and enlarge this hole in the plug, to at least 1/32 of an inch larger than the bolt size.)
Reinstall the lockplate and run the tap thru the stock hole into the lockplate/bolster. As was mentioned above, you only need to tap about 2 to 3 turns worth of threads.
Remove the tap and the lockplate/bolster from the stock.
Restart the tap in the threads in the lockplate, apply the thread cutting oil and then finish tapping it all of the way thru.
Using this method, the hole in the stock will be perfectly aligned with the hole in the lock, the tapped hole will be straight with the hole in the lock, and you won't have any thread cutting oil on your wood.
As for how far the lock needs to be inletted into the stock, the answer is "just until its bolster/pan touches the side of the barrel. There must be no gaps, but at the same time, you want the wood to support the plate when the screws are tightened.