@Frozone, I think there are two ways to remember pegs as in a bestiary. One is as you mention through use over time with rote memorization. But at the beginning, I like to create a story. My stories use quite a bit of elaboration to add detail but mainly to reinforce the ordered connector of the peg (the alphabet letter in this case).
Each memory image creates a scene or visual sentence. It sounds like a child’s story when done with a subject-action-item-location type of structure which I prefer. It’s what I call the SEA-IT structure (subject, elaborations, action, item, terrain).
The alligator’s belly aches from eating too many apples in the alley. He says “my achy, achy tummy needs some meat.” He spots and chases a bear with bees buzzing around their hive in his bedroom with honey he wants to put in a bottle. But the bear tells himself “Bee-ware!” And so on.
Concerning number pegs and letter pegs, that’s just a simple conversion and reuse. A = alligator = 5714 in the Major system and you can choose to make it a one-, two-, three-digit system if you want. B = bear = 94. You won’t have enough number pegs to fill an alphabet peg system, but you might find enough alphabet pegs for number pegs.
Using a memory palace is too much for beginning with your first alphabet pegs in my mind but it would work. The one case where I think it would be appropriate is if you create a paired peg list where you have a palace of 26 or more locations already set up for other things and don’t mind sharing the space. You might have a subject peg list (Antman, Batman, etc.) or location peg list (Alaska, Bahamas , etc.) and let them interact with the animals. But even with those, I would have a story for traversal.