Reaming is probably better even with a lathe. OD reduction is lathe work (or grinding as was mentioned).

I don't really know if 4130 is the right stuff. Most/a lot of lugs are just plain steels. There may be advantages to that, for instance the whole don't braze 4130 think is something we have nailed with tubes, but not so sure tiny elements are there. There are also other processes, like stretching and shrinking that might go better with regular steel. I know people use 4130, and getting the raw stock in the same draws in hi tens doesn't save any money... At least around here.

Then making lugs out of flat stock would be interesting, and possibly better, or more authentic looking. Cast lugs are just another way lugs make us do bad things.