Balsa is so soft I’m inclinded to think it might not mill so well. But I’d be excited if it does–I’ll look forward to hearing whatever you find out. Best of luck with it!
As an occasional user of CA adhesive I wouldn’t like to use it with Balsa wood particularly 1/8" or so thick. I think you might have difficulty in getting the piece off the baseboard without breaking.
I echo @Kopah - I’d use a drag knife. I have a Donek D3 that I’ve used with paper and thin cardboard with decent results, but you’d need a D2/D4 for the thickness you’re cutting.
The price of the Donek tools is steep, and depending on the complexity of your cuts, you might need to additionally invest in SheetCAM to get decent results. The Excel gcode corner-action tool that Donek distributes has some limitations with complex tool paths.
I will be watching this thread with interest to see if you’re able to get good results with normal milling!
I use a Rockler 1/8 " straight Bit, 1/2 " long double flutes, 1/4" Shank. #34780 #6 on my Makita, soft wood in Carbide Create. The cut is very smooth and just a few fibers at
the bottom of the cut. I only use the blue tape and ca–no tabs. Champering and round overs,
I do on a router table. Using a very sharp razor, takes many fine cuts not to tear the wood, I do not
see a drag knife working very well.