I would say that it depends on your tools, your skills, and whether you are using the cowl as a cooling device or just an aerodynamic shape.
Starting with the last idea, if you are using the cowl to force air thru the cylinder cooling fins you will need a close fit. That means that the cowl fastening scheme needs to be complete, and have positive locating features. Then drill the holes in the mounts to locate the engine. Mount it and measure carefully. Now bore the hole in the cowling for the cylinder. If you have a new, sharp Forstner bit you have a decent chance at a clean hole. Make it undersize if you are concerned about cleaning up the inside, or worry you will be off a bit. Then progressively start hollowing to clear the venturi, needle valve, fuel filter, etc. Finally, hollow for lightening, keeping in mind this was a pressure cooling cowl.
If you don't have a drill press, or Forstner bits, then we're really talking Dremel work here, unless you built up the cowl in layers and plates and triangle stock--which works great. For the Dremel Artist, I would follow the same sequence as above in terms of what to cut out when. And I switch between the knife and the Dremel depending on which I think takes the next chunk out easiest and most accurately. Measuring and marking with precision is key. You may want to work from templates depending on your desired shape. I find that the coarse sanding drum works better on soft balsa than any of the various burrs and bits that I have. Better in terms of faster removal, and better in that it is a larger diameter and a closer match to internal contours, and I'm less likely to have small gouges.
If the cowl is just an outer skin to finish off the external aerodynamics*, then once the outside is shaped, just chop away at the inside in any old fashion to get the material out. It's all gotta go, so forget about all the early trial and error fitting. Get the walls down to nearly your final desired thickness and then do the marking for the holes. Use sharpened brass tubing for the holes where you can. Cut them undersize if you think you'll need to fudge.
These would be the way I'd approach it, but everyone seems to have a way that is best for them.
The Divot
*--This is true of all of the ARF fiberglass cowls that I have seen, as in the ubiquitous igNoblarf