All things considered, I would suggest in the motor with a common hand drill. Take your time and keep it straight as possible. It's not like you're going to wreck a good crank. Were it not for the fact the cut on it looks like bandsaw, I'd suspect it was done in block last time, and it very well may have been.
Again... keyway and flywheel in place and firmly seated. Otherwise that side is going to be weak and your drill will be subject to drift that way. You'll want to start with a bit that fits snug inside the existing threads, and run a pilot hole to depth before drilling to size.