The upgrades already increase the drill dps (so just boost the drill dps for all levels by +100%-300%)
(the drill upgrades could also increase the aoe)
The idea of starting the drill instantly would actually let it be a drill (ie clearing rocks)
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I like the idea of the drill upgrades increasing the splash and damage. That gives Blizzard a lever to make sure the drill is impactful lategame even without its topbar, but not too powerful in the early game.
I agree that 50dps fully upgraded is too low.