Pegboard never a favorite, 1/8" hooks are the worst, it was rare to see 1/4" available at retail. Detriment of hooks is in tools, few have balance or protrusion for a hook. Shadowbox holding is reliable, I like open corners, to avoid trapping debris, usually by just inclining he holder.
That said, the 'library' of tool & surface grinding wheels will hang on slatwall, a stub of PVC shrouding the wire hook. At Habitat Restore, scored 7 panels uber cheap n' cheerful, that'll be more than sufficient. Think rigging a full length french cleat will save a lot of carpentry.

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