yes you can use pin gages. whether or not you must use the categorical approach or continuous data approach is dependent on how chunky the data is. If you have great resolution and/or your process is very capable then the classical continuous approach works. (if you have chunky data you will overstate the standard deviation and therefore understate your Cp/Cpk.)
As always, it depends on your usage...
we might also ask what the hole is being used for? this often dictates the measurement system. I once investigated a system for a rather large hole that was fitted with a bearing in the assembly. We were having problems with the bearing not fitting in the hole. Our expensive air gage passed gage R&R and the capability study on the hole diameter and comparisons of the hoels that fit and those that didn't showed that the diameter was on the small side but fully capable. This just didn't make sense, so I had the hole profiled using a CMM at 3 different diameters. (the CMM had previously failed gage R&R as had a bore gage.) turns out that the part was beign being held during turning in a 3 jaw chuck and the chuck was deforming the part ever so slightly. we could clearly see the tri lobular pattern in the CMM results. the air gage correctly determined the volume but not the SHAPE. The shape resulted in an effective diameter for the fit of the bearing...function comes before form!
As always, it depends on your usage...
we might also ask what the hole is being used for? this often dictates the measurement system. I once investigated a system for a rather large hole that was fitted with a bearing in the assembly. We were having problems with the bearing not fitting in the hole. Our expensive air gage passed gage R&R and the capability study on the hole diameter and comparisons of the hoels that fit and those that didn't showed that the diameter was on the small side but fully capable. This just didn't make sense, so I had the hole profiled using a CMM at 3 different diameters. (the CMM had previously failed gage R&R as had a bore gage.) turns out that the part was beign being held during turning in a 3 jaw chuck and the chuck was deforming the part ever so slightly. we could clearly see the tri lobular pattern in the CMM results. the air gage correctly determined the volume but not the SHAPE. The shape resulted in an effective diameter for the fit of the bearing...function comes before form!