I'm thinking the hole in the fender method will be fairly effective at moving more air toward the rotor. If you look at the backing plate, it is angled away from the rotor toward the front of the car - the only explaination for this is that it scoops air toward the centre of the rotor. An increase in airflow to the wheel well would increase air directed toward the rotor. I've had other performance cars where the backing plate hugs the rotor pretty close - the M3 backing plate design is quite different.
With respect to the stock brakes, they are quite capable with upgraded pads on street tires. While I'm by no means a good driver, I just finished a track day at the track the local indy race was run on. 3.6 km with several locations braking from above 120 mph, two of which were into hairpin turns. Brakes did not overheat, boil the fluid, or burn the pads in repeated 25 minute sessions. An instructor that rode with me in one of the sessions commented that the brakes were very good.
On semi-race and race tires (sub-100 treadwear), I can see the additional load over-taxing the stock set-up though.