Is it possible to replace the dot inlays on a strat? I want to put in these abolone dot markers:

My guess would be to drill a small hole over the existing the dot marker and then glue in the new marker with tite-bond - I'm probably wrong in doing this and so that is why I am asking you guys.

Biggest problem is that my 12th to 22nd fret is scalloped.

Any advice?

I don't believe in signatures. Ah, sh...
This is not going to work on a scalloped neck. Only very thick material could be used on an application like that. What you would what would be a material that was at least 1/8" thick, like mother of toilet seat, or recon stone, something like that.

Beyond that you have the process correct. Drill out, glue in and file level.