Work holding is a loaded question. There are a million ways to do things. Without dimensions of the flywheel and what your chuck looks like I don't have a definite answer. Two ctrs and dogs are fine for light cutting, if your doing more than two or three you may want to make a arbor and run it just like it would be on the engine or you may be able to hold it on your face plate. All kind of options. To avoid all the confusion from everyone feel free to pm me and I will do my best to help. Remember too many cooks spoil the stew.

You are correct about tooling costing money, it never ends.