Sure, any modification to the barrel could be dangerous, but if it was done by a prefessional smith following a tried and true method, it should be fine.

For a 357, I would guess you will keep your shots short enough for a red dot. You might look for something small and lightweight like the Burris Fastfire, I think it is called. Weight is the real problem with any optic on a pistol for hunting. Generally I prefer open sights out to 50 yards.