OK mate, no need for any embarrassment - as my good lady always says, "No one ever fell down from heaven (yup she's dreamer!) knowing it all".
OK, a masonry bit is really NOT ideal for ali, (by a LONG way I guess) and a lip and spur, I also would have thought "not". But if it's sharp, and you're actually "only" drilling a bit of wooden dowel, why not? (Please forgive my complete ignorance of anything at all to do with pens and making them - apart from writing with them now and then)!
But if it IS really ali you're drilling, and not wooden dowel, by all means buy a 7 mm HSS drill. But as you want a fairly long hole (about 120 mm at least, I guess?? Almost the full pen length??) then it won't be all that cheap. But it will last you. And as said above, take it easy (on the pressure - "feed rate") and on the rpm - slow. Then clear the swarf VERY regularly and there you jolly well go.
Yup, if the drill you used was already blunt and it really was ali and not wooden dowel you were drilling, then I'm not surprised you had problems. Just to be a bit "technical" for a mo, most ali will melt at around 700 deg C or a bit less, and believe it or not, it's pretty easy for the ali to reach/exceed that temp for a short period while drilling. Add in the blunt drill (= increased temp) and then a long hole and you probably not clearing the swarf VERY regularly, and you have a recipe for, if not disaster exactly, then at least a lot of difficulty. What's actually happened is that tiny bits of the ali right at the cutting points have melted and stuck themselves to the cutting edges (such as they are) and started to block the flutes. In short it's an ever increasing circle of problems with each "defect" adding to the next.
But don't forget you can buy a set of cheapo "chinese" jobbers length twist drills from about 2 mm to 10 mm in 1 mm steps for about the same price as a decent long series 7 mm drill in HSS from a manufacturer like Dormer. (NOTE: I THINK - I'm completely out of touch with UK prices).
It's up to you but if you go the cheapo route (I've bought 2 sets of cheapos, 1 was rubbish and the other excellent). And if the 7mm drill in said cheapo set is any good at all, it's then an easy matter to find a bit of tube to fit the shank and Araldite it to the drill. Attacked from both ends of the job you should get the hole depth you want (I'm assuming that you're doing this boring on your lathe, right)?
But of course there's always the risk that your cheapo drill set is made of cheese (some are, though by no means all - and there's no real way to tell without suck it and see). So if you add on your time, the cost of a bit of tube and the Araldite it'll probably work out the same price as the Dormer, etc, "proper" drill in the end.
I guess it all depends on how many more pens like that you're going to make in the future, but having spent a working lifetime drilling holes in ali (slight exaggeration, but I started my aircraft engineer apprenticeship in 1961!) then I promise you drilling holes in ali is easy-peasy when done as said in my first post.
Again good luck.