This looks like a great project for laser cutting, but I'm actually more interested in the peg-board itself. I would love to have a big one for the kids room that was compatible with the BRIO construction sets.
For a bigger pegboard, I'd almost certainly go the plywood route, ideally with access to a CNC drill or a laser cutter through some community workshop. The hole precision mattered more than I expected, and getting a whole board right with a handheld drill was surprisingly tedious.
I used oak plywood, and it has held up well so far, including in our kitchen. You do get the occasional tiny splinter, but nothing serious.
The main trick for getting clean holes, especially on the back side, is to drill into a sacrificial board so the exit side stays supported.
If helpful, here's a close-up photo: <https://files.virpo.sk/pegboard.jpg>