Rack questions

I'm fairly sure they're eyelets, there are eyelets on the front forks too. Wasn't sure if they were just for mudguards or if they could take racks too - but you have a point about the weight.

Not sure how else to do it, though - can't afford another bike, and I'm not going to have a support car...

if standard bike accessory bolts (bottle cage, mudguard etc) bolts fit, I think 4mm could be less. but all bike bits tend to use the same size.

Well if they fit, then they are indeed eyelets for mudguard & rack

Your dropouts look like the thick stainless steel sort which will be plenty strong enough,
but if your bikes a fancy super lightweight 753 etc racing frame it might not be the best idea to haul huge load. I hear many high end steel frames flex a lot on the stays during normal unloaded riding.

A tent, sleeping bag, & some clothes should be fine on any bike. A water tank over hundreds of miles is probably not the best idea though.

Also, I wouldnt want to go touring on a wheel with such few spokes!