hi,
you certainly can use a .16, just work it side to side to enlarge the slot.
with regards to tools, i buy every single guaged file i can find - i have a nice big long line of them mounted in a block that i use every day. The angled type seem good, and maybe i'll pick some up next tool raid i do, but the guaged sets work a treat for me.
i have stacks of needle files, but i don't really use them for nut slots, most needle files are of fairly poor quality (try shesto :))
have a gander at frank ford's site
www.frets.com for info on filing a nut slot, or the stew mac site. They'll tell you eveything you need to know,
cheers,
steve