The bulges are manufacturing imperfections in the thickness in that section. I inflate just enough and submerge in water. Make sure the valve core is screwed all the way in also. I use contact cement and a piece of old latex tube as patches with great success. Coat both the tube and patch with glue. Inflate enough to give tube shape. Let pieces sit for a few min until tacky and then apply patch.
I use Vredestein latex.
My experience as well. Sometimes the hole can be so small you have to submerge the tube in water. That is why I carry a spare tube on the road. At first I just cut small sections of Velox to cover the spoke holes, but I think over time the edges of the tape irritate the tube and I started getting occasional "rim" flats. So I ran one strip of electrical tape over them, problem solved. Over time, the electrical tape would get bunch up (pull away from the rim bed edges) causing it to have long length-wise creases.
I didn't get any flats but I figured that wasn't a good solution. Ran out of electrical tape, took the Velox off, and used an old Ritchey nylon rim tape. I swear I could feel the sluggishness of my back wheel after that
So I took the tire off, put talcum powder on the inside of the tire and on top of the Ritchey rim tape, now the sluggishness was alleviated but not as nice as the electrical tape feel. So ditched the Ritchey tape, put the Velox pieces back over the holes and put one strip of Rox tape on there....
Rox tape doesn't bunch, back to the original feel!