Hi, TS,
Your Alpha is an excellent starter choice! It flies quite nicely on small (1/2A and A) motors and still gets right up there with C motors! (I strongly recommend that you start with the small motors, and get your rocket back!)
The spill-hole thing is supposed to be a way to reduce the amount of swinging and swaying that occurs during descent. It also reduces the area of the parachute and slightly increases descent rate. This might not make any difference if your launch field has lots of grass, but if it drifts over a paved parking lot the increased sink rates could cause a little more landing damage. I am not sure that I recommend you try chopping up your parachute until you launch a few times and decide for yourself if you want to try it.
You also have the option of replacing the parachute with a streamer. You could use a length anywhere from 25 to 50 cm (works fine, gives a fast-but-safe rate of descent) upwards to a meter or two (your rocket will come down much more slowly, and you could be back to the same drifting-in-the-wind problem that you can have with a parachute). You can use plastic surveyor's markng "tape" (2-3-4-5 cm wide), or cut a strip of material from a outdoors emergency survival space blanke (a thin sheet of aluminized mylar plastic), or even use a length of crepe party-streamer paper (use white, because the colored ones stain your hands). Basically, you can use about anything to make a streamer.
You can leave off the parachute (and streamer) completely, and just connect the nose cone to the rocket. The two pieces will tumble down safely just fine. This is called "nose blow" recovery and no, I did not make that up. If it is a windy day, this system might be best.
One more thing: Estes rocket kits are kind of famous for not giving enough length for the recovery shock cord, and the nose cone sometimes snaps back and crumples the front end of the body tube. You can add a length of cord between the end of the shock cord and the nose cone---50 cm would be plenty. You can use kevlar cord (f you have it), or nylon cord (check it between flights for scorching damage), or other kinds of cord (just be sure they are strong enough).
Let us know how your launches go!