Along with not selecting "curves" and being sure to use "surface edges" when running the blend command, the blend will want "Open edges".. So on your cylinder, delete the bottom face of it by clciking the cylinder, then clciking again on the bottom face (A drill in selection) and deleting it.. Do the same for the inner wall surface of the cutout. The 2 edges will then blend.

The boolean command will work with curves also.. So if you have a solid and create a circle curve in front of it, from the front view, the boolean diff will punch the circle out of your solid (The same as extruding the circle through it, and using the boolean diff with the created cylinder) If the "tube" needs to follow a 3d path, then use the sweep command and boolean diff that.