Here's a couple of pics to help locate where to drill. The first one has some measurements that work on all the older ('02-'04) front bumpers. I mounted mine 3/4" out from the grille and can get them aimed but they do touch which is why I show the measurement as 1":
And yes it is 3 1/2", the angle of the image makes it look less than that.
And here is one of the underside showing the opening to access the bolts once you mount them - its the rounded rectangular opening just inboard of the hitch mounting point.
You can drill right thru the plastic cover without removing it, just be sure to add some silicone sealant to help keep water off of the unpainted metal edges. A long extension and socket from underneath will get the nuts onto the bolts and help to get everything tightened up. Good luck with the install and be sure to post some 'after' pics

Oh, and I just took a look at the installation instructions for the tow hooks, and the two holes you'd need are right where the tow hooks mount, so you'd need to remove them if you go this route.