Love the in-process commentary!
I usually change my mind many times in the process so that eventually I make stuff it the reverse order it should have been done.
I finally settled on a similar process for the pin pivot hinges, except I use metal (brass) since the holes can be smaller, leaving more "meat" in the wood.
Just fit the lid flush and square, then jam in paper, credit card, thin cardboard, whatever to fill your gaps. Apply a clamp or two to squish the gap filler tight so the lid won't move.
Drill the holes and everything will be aligned.