it's been done numerous times but i can't remember if anyone's really done a writeup on it. the most common place to run it is to take out the passenger side fog light and put some dryer hose, flexible metal tubing or even pvc running up to the afm. just make sure you won't be sucking up lots of water during heavy rains
i've just got a 3" filter adapter bolted on to my afm with a big ol' k&n filter on that. as for widening the holes, if you're talking about taking the manifold off and using a die grinder to widen them you could, many have used die grinders to do a little bit of polishing and widening of the intake side.
as for the exhaust side, don't touch it. i can't begin to tell you why, but something about the sharp edges creating swirls and backpressure and it all just works better if you leave it alone. you could get an obx or pacesetter header if you want it to flow a bit better.
hope this helps, run a few searches for porting/polishing the intake and see if that's what you want.