2004 Honda Shadow VLX 600 If I drill out the rear baffles on the stock exhaust with a hole saw will the bike still run good or will I have to put in a jet kit or make another modification?

You don't have to drill out the whole baffle. I put 3-3/8" holes in the front of each baffle and my 600 vlx has the low tone that I was looking for and the volume is enough to be heard on the road with out shaking my neighbors Windows when I leave at 6 AM. So for I've had no popping on decel so I don't think I'll need to re-jet the carb.

You may not have to rejet, however, most new bikes come from the factory a little on the 'lean' side, to satisfy emission requirements. Keep an eye on your plugs. If they run clean and white, you're too lean. Rejet before you damage the engine and enjoy the better performance.