ok i've drilled out a few bottles before, its not that hard, first wear gloves, thick as shit gloves, 2nd put on safety goggles, and third put on a good mask, you don't want to be breathing in glass.
ok fill the glass with sand and water, sand first and then top it off with water, this will absorb ALOT of the heat, and yes i advise a diamond tip drill bit but it isn't necessary, just use a high speed and very little pressure, i usually only let the weight of the drill or dremel put pressure on the glass no more. tungsten will work for drill bits too. have a 2nd person wearing the same safety gear slowly poor water down the bottle to help cool it. oils can work too but a lot of oils are flammable and that isn't a good idea since your glass can actually start to glow and melt while drilling. also make sure no water runs up your drill bit since water and electricity don't mix.
if you need to expand the hole get a tungsten drill bit for cutting tile, pretty cheep, or u can use a diamond but it does wear down quick, and just run it around the edge for a second and give it a second to cool, and go back, or run water down it if u can, i just attached a bottle cap from a 3 liter so the threads face the bottle on my dremel to catch water befor it hits the electronics. Good luck