You can use endmill's to cut wood with, single flue are the best for wood if using an endmill. HSS router bits also work very well, though don't last as long with some types of wood. I completely agree on going to birch or another higher quality plywood. I get mine ordered from a mill in bulk here in Scotland which is of no help to you at all. Best of luck and the varnish works, it just adds an expense and the time for the varnish to set.

Michael