Happy 4th of July to you as well, Charlie!
It's funny you should ask these questions, as I just in the last hour started up my '71 after having to take the head off in the last few weeks because of a stripped spark plug hole. While I had the head off to have it fixed, I also put in a new water pump, heater pipe, cleaned up the manifolds, and set the valve clearances. The good news is that it started right up, and there were no puddles of oil or coolant under the car. But enough about me.
Yes, I would drain the coolant out, using that petcock valve on the passenger side of the block (sometimes it's just a plug). When I clean the top of the block while it's still in the car, I tape off the 6 oil pressure bores (holes) so that nothing falls down there. If dust or carbon chips or the like fall into the oil line return passageways, I just ignore them as they'll end up in the oil sump pan and I usually do an oil and filter change soon after rebuilding the engine anyway. If it concerns you, you could tape off those holes as well. As for the cooling passageway holes, I mostly ignore what falls into them (except for metal stuff like nuts or bolts), and then I blow them out really good with a combination of a shop vac on some holes while shooting compressed air into other holes. I also put new coolant in the engine after I get it all back together and have verified that everything is good and I don't need to take it apart again. Don't laugh, this has happened to me...
As for the 10 head bolts and holes, I clean the bolt threads with a wire brush and blow compressed air down into the holes to remove any debris, and then run the bolts up and down into the block a few times with some oil on the threads, just to make sure nothing is sticking. You could also use a thread chaser. I wouldn't use a thread cutting tap, as I've heard that this can damage bolt holes. Not sure if it's an old wives tale or not, but I'd rather not take a change with the head bolt threads in the block.
-Bryan