A 27.2 ID of a 28.6 OD steel frame is completely normal. Tons of steel frames are like that. 27.2 is by far the most common post. Not only is that .7mm enough, you also have the lugs that reinforce the top of the seat tube. I see many of the current Riv models are taking 27.2 posts now. So they appear to be moving away from seemingly everything taking a 26.8 post ! From my recent web shopping, most any of the steel frame designer/contractors/sellers like VO, Crust and Soma all use 27.2 posts. Only the oversized ST models take a larger post. That said, any steel frame that takes a 27.2 post you wouldn't even know if it was reamed from the manufacturer or not.
The Cyclus reaming tool is self guiding. It's modular, the silver part being the cutter. The initial black portion is to guide and center it in the seat tube. Anyone who has tapped a BB or reamed a head tube can do it. Even if you haven't there's some YT videos of people doing it.