Lay out the aileron actual size on the sheeted core. Then draw a line 1/4" on each side of the outline. THIS is your cut line. You end up removing 1/2 inch of material (1/4" from the aileron, 1/4" from the wing) which is replaced by the 1/4" you use to outline the aileron and line the cutout in the wing.
The important thing in making the cut is to angle the knife blade stlighty TOWARD the hinge line, so there's some extra foam that you'll sand away later. You cut about halfway through from each side.

As for the hinge gap, it's just like on any other hinged surface. The front of the aileron is beveled to allow it to move, and the hinge slots can be slightly relieved to get the smallest gap possible. It's all sealed with covering or clear sticky tape, anyway.