You naturally ride with your arch over the pedal spindle, just hop on a cruiser and look at your feet after a couple minutes.

However, ball of the foot over the spindle is still the best rule of thumb. Spinners tend to slide the cleat up a hair, mashers or power riders slide it back. Make small adjustments and see what feels best.

I've never seen anyone move cleats by drilling new holes. However, I've have modified cleats to get a bigger q-factor (moving the feet apart or away from the bottom bracket). Most cleats don't offer enough adjustment there.