you would have to take the lug off to cut the shapes in, cuttin gin with a dremel will be difficult as the tolerance between lug and pipe are tight and you will most likely cut into the pipe which creates a structural problem.
some one posted that the lug is cast, i'm machinist and generally work on custom bikes (motorcycle) so maybe there is a reason for it but....what lunatic would cast a lug? casting creates weak parts, casting has all sorts of problems for parts designed to cojoin and load any kind of pressure.
if you really want to cut the designs in, i would suggest starting out with a caliper and measure exact pipe width, should be able to find pre fab lugs and find ones that a)fit and b)has enough material to cut out patterns without sacrificing structural integrity. you will need a torch to heat the pipe up and remove the lugs (i would guess it's brazed, clearly; scrape the paint first and heat the joint up, it will expand in the process so get a pair of crappy vice grips to help). careful not to crimp the pipe in the process, and good luck. for the torch, assuming it's brazed a propane torch should get it hot enough.