For flak and 20mm HE and HEI, use a Steel Cutter in a Dremmel, and grind away the plastic on the inside of the model until you can see light through it. Then use the point of your knife to punch through from the outside, giving it a little twist when you do. For exit holes, do the same thing, except punch through from the inside. Obviously this means planning the damage weel, since you'll be doing it during pre-assembly.
Bullet holes will depend again on the ammo, .50 cal/12.7/13mm with AP will make round holes with the metal going into the holes, and exit holes will again have metal pushing out., API will make holes and start fires on the inside. 7.92/.303/.30 cal will make little holes going in, but usually don't exit as often as they bounce around inside, unless they miss hitting anything internal and just sail on through. This pic will give you an idea of flak damage. Notice the varying sizes of the shrapnel. 20mm HE will make sinilar damage on a smaller scale.
I'm in the process of doin' a shot-down Sptifire dio, here's some pic of the Dremel work.
Plastic thinned until light goes through:
Interior after holes made
Exterior:
Also keep in mind that for major damage, some interior detail will be exposed, so you may have to model some interior structural parts; I use some strips and drill lightening holes in them.
"Blown away" canopies are another issue. They're made of thin plexiglass, and don't shatter like your car's windows, but into shards and chunks... Most kit's canopies are far too thick to show this, so the next best thing is to cut away the panels from the frame and glue in some thinn acetate shards, or better yet, vac-form a canopy and cut away selected pieces. Bullet holes are easier. Pushing a hot needle through, then trim off the resulting "doughnut" of plastic around the hole, then scribe radiating or "Spider-web" lines around the holes. Armored glass in windscreens will become almost opaque with .50 or 20mm hits, a maze of spiderwebbing.
"Busy" canopies with lots of framework, you can cut out the panels, but haveto model back in some of the twisted aluminum with strip stock..
Last note on aircraft damage: Unless you plan on destroying it, keep battle damage to a realistic limit. It has to remain flyable, at least to point of a survivable crash landing... Study pictures of planes that made it home, or crash-landed with a surviving pilot or crew. Some planes went down with surprisingly little damage, especially ones with liquid-cooled engines like the P-51... A hit in the cooling system was a death-blow to them... There's always the "Golden BB" as well, one paddy-daddy with a deer slug bringing down a plane wasn't nheard of.. This goes double for hits near the cockpit... Bullets and shrapnel that miss the armor plate and do in the pilot are pretty common in some cases, especially side hits...
Also, don't model hits in fuel cells of aircraft without self-sealing tanks. Those didn't make it home very often at all... Ones that had them, be sure to add some fuel-leak stains on the finish, as it takes a bit if time for the sealer to work and some fuel will escape from the holes..