We have created countless wildlife habitats and have always used top handle trim saws to bore in and create our hollows. I tried using a forstner bit on a drill as well as a hole saw but they never worked out quite right. Arbortech has some tools that could allow you to use an angle grinder in tree but I haven't used it in tree, only for carving projects on the ground.
Hopefully this helps!
https://www.arbortechtools.com/us/shop-online/power-carving?srsltid=AfmBOooSk1oXxQLLCEUgs-tNdWEdv2burNlPvdNEU9-a2FW_SGsw36cR