All grooved - go with your original plan.
I would leave the lifter valley holes open, but JB Weld some magnets in the area instead.
However, Moroso does have a screen kit for those holes.
Have you successfully used Glyptal before in this application Bob? I tried it once on a new block that I did final cleaning in a heated tri-chlor vapor degreaser.
That stuff cleans into the pores of the cast iron. Anyways, after a short time running, the Glyptal started to come off. I ended up scraping it all out of the lifter valley - AND IT WAS NOT EASY! I use Rustoleum now - and it stays put.