Hi, with your awl I would put some small squares of leather on it to prevent you from going to far up it, you only need a hole large enough to just get your needle through.
You are correct with the linen thread 18 is the size & 3 the ply, over here the other thread I use is poly cotton, a no12 is the eqivalent to 18/3, & no8 = 18/4, I also use a no20 not sure of the equilant but its finer than a 12, I only use that for very fine stitching, for everything else I stick with the linen threads.
I must say that Im in the UK & the sizes may be described differently in the States.
With your craftool punch I would be tempted to use it very lightly so it only leaves a mark on the surface of your leather then use your awl to actually make the holes.