[sploo]

I would just mill these holes with a 1/4" bit - it's the kind of work CNC routers are made for. A direct drive spindle with enough torque for a 40mm Forstner bit is going to be unreasonably big.

The problem is: dust and noise (vs using a Forstner bit).

That said, I've just ordered one of the Chinese VFD controlled spindles (air cooled rather than water), as a bit of research on the subject indicates even the air cooled models are still much quieter than routers, and (understandably) they're much stronger at lower rpm than an equivalent router. My little CNC machine isn't rigid enough to achieve speeds that would be ideal for the higher rpm of a router, so hopefully the spindle (running at a lower rpm) will be more suitable and a lot quieter. Not going to solve the dust problem though I guess, but at least it'll be an improvement.