Im a little new to AWS, but I've been a Linux admin/engineer for a while. I had a question regarding AWS DNS setup.
I setup a Hosted Zone inside Route53 so I could configure the servers to use hostnames without having to tweak the /etc/hosts file for every record. I went into the VPC and created the DHCP Option Sets and set the domain I set in the Route 53 Hosted Zone, as well as the nameservers listed there.
That allows me to do the lookups to the servers on my domain, but obviously since I removed the default Nameserver from the DHCP Option Sets, it cant do external lookups.
If I create a Option Set with the default Nameserver, and then the rest from ones assigned to the Domain, that wont work either, it just uses whatever teh first NS entry is in the resolv.conf (which I expected)
That's not how DNS works. You specify a set of DNS servers, your clients throw their requests at them, and the servers have to deal with whether or not they can get answers to the clients' queries.
Fortunately, with AWS, Private Route53 Zones are available. To use them, you'll need to configure your VPC hosts to use the amazon-provided DNS resolvers. More details on configuration are available in the linked documentation.