1) either its the lack of fresh air, lets face it smoking in a house in the winter means no open windows and it will get hazy fast. if your not used to smoking any sort of niccotine you will feel sick, possibly puke.
2) those holes are not a problem at all, mine has them as well. i could be wrong but i believe if you plug them you might constrict airflow and make it harder to take a pull. so just leave them
My Pipes: 32" KM Mash'al, 14" Mya QT, 18" Mini Mya