Forstner bits MUST be sharpened to work well. With a regular drill bit you can get away with a pretty dull edge in harder woods, not so with a Forstner bit, and even with a sharp one if you use it on soft balsa it won't work well.

The picture below is an f-hole cutter, for cutting the circular part of an f-hole on a violin, cello or other stringed instrument. I know not everyone wants to buy a set of these, but it would be very easy to make something that works just a well on balsa. The one pictured has a variety of different size cutters that thread on the handle.

Drill a center hole in a dowel then epoxy it into a brass tube about 1" from the end. Cut the end of the brass tube like the f-hole cutter then put a piece of music wire 1/8"-3/16" into the hole in the dowel. You could make a couple different sizes. To use it, drill a pilot hole the size of the music wire, insert the music wire and twist. The holes it makes are excellent, clean and accurate.