This is what i did the first time Mk1, using the holes and is I reckon the correct way to do it.
I found the blank(mine was ply-wood) got miss-shappen quite easily if you hit the metal too hard. also I found it difficult to get an exact match, especially around the handle area, using the actual mug get's around all these problems!
I guess ideally you'd use some sort of industrial press with a male and female former. and you'd make lids in seconds!
And if i had other mugs i could make lids for them too.
Think someone was making them and selling them made like that. Warthog1981?
I really like that handle idea, I am making some for my mess tins so will nick that.