Vent holes are intended to keep the internal (ground level) pressure inside a rocket from pushing the rocket apart at its separation point when the outside pressure is lower (at altitude).
At 1000 feet I don't think there's really any chance that you're going to have an issue with that. On the other hand, there's no harm in drilling a small vent hole, if for no other reason than so that you don't forget to do so when you DO fly high enough to need one.
I guess there really should be a hole in the airframe anywhere that pressure might build up inside, so you could argue that you need one above the piston and one below it, but I've never done that, nor have I seen it done. If the piston is loose enough to slide properly, the air would (*I think*) be able to move past it. The piston does NOT need to seal the airframe - the ejection charge will certainly push it out even if there is leakage around it.
The only place I'd think you should NOT put the vent hole is right where the piston sits, as the piston would block the hole and render it useless.
That's my two cents' worth, based on nothing more than what makes sense to me. Be sure to talk about it with the person supervising your Cert.
You need to also make sure that the separation point of the rocket is "sticky" enough to prevent drag separation, which is a completely separate issue. You should be able to lift the entire rocket by the nose cone.