You can put in side holes but it also helps if you throw some cooling (cookie/bread) racks in the chamber and place the cups on top. That's what I do and they do drain well despite that bits of perlite will stick somewhat in the holes. I have my rootings in clear cups with perlite, covered with baggies. I remove the baggies once per day for a couple hours - labor-intensive for a lot of cuttings, I know - but it's worked well for me.
As far as the stunted growth once roots begin, I always try to blame it on a stubborn cutting. I'm not sure if that's always the case, but if the conditions remain the same for all cuttings, it's difficult for me to figure out why one stunts and others spike. I think some are just really slow rooters compared to others. For example, the Domenick cuttings I have have exploded. Roots and leaves everywhere, after just 3 weeks. I have a Black Madeira going and it rooted ever so slightly after 4 weeks and the buds are swelling - look so pretty - but they're pushing out and opening at a glacial pace. I certainly think it's advantageous for the plant to root quickly in order to build strength, but I think they do sometimes move at their own pace.
That said, I still have A LOT to learn :)
Good luck!