Actually, coolant does circulate even with the thermostat closed. All the liquid-cooled engines I'm aware of have internal passages designed to keep the coolant moving through the water pump, block, and cylinder head even with the thermostat in the closed position. Drilling the thermostat might prevent an air bubble from forming in the immediate area of the stat, but it won't have a significant influence on coolant circulation. Some thermostats have a positive blockoff feature to close off the bypass port once they open, but that's not so on a stovebolt engine.
Jerry
