My first robot was driven with SS-50 stepper motors (NEMA #43).
Problem with using stepper motors is that normally the power to weight ratio is not that great. Easy to move accurately by counting the steps, but needs more battery power!
1/8" aluminum is fine for a 'bot that size. Yes, I’d think you should be able to cut it. With CNC, you can just take smaller cuts, and repeat them! .020" (or lighter) a cut will take several passes, but who cares!
The 1/8" or 3/16" endmills should work for you. I avoid cheap imports, and you really don’t need any coatings. A little can of “aluminum tapping liquid” helps to make clean cuts, that; and keeping the chips cleared out.
the radius of the cutter limits how small a radius you can cut. And the radius of the tool should actually be slightly smaller then that of the curve you’re cutting to keep it from “grabbing” in the corner.