Use a wood dowel with sandpaper wrapped around it. Start with pretty coarse paper and as you get close to the size and shape start using finer paper. It will be slower going but safer than power tools which can grab and crack sides. The bigger the dowel the easier it is to shape the hole nice and round.
Or you can make a cover like I did for a friend who had a cheap guitar that the electronic no longer worked on. He wanted to take out the electronics but also didn't like the square hole. I made this out of mahogany and drilled the mount holes in the same location as the electronics so he could always go back if he wanted.
Good luck
TEK
