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I usually use old Coke bottles and i cut the top off just above the label area. This is when you fill the bottom with the water chicken waste. You remove the cap and invert the top so that the opening hangs down into the bottle like a funnel. Make sure the water is not so high that the inverted opening touches it. You need the flies to fly into the opening and up around the side of the inverted top.
I don't usually poke holes to hang the trap i make a sort of sling type of thing with string but it would be impossible to describe. It sort of looks like a hanging plant holder. I think holes, placed near the top of the completed trap would be fine as long as they are only slightly larger than the type of string/yarn you are using.