Tom, I'm a little confused here. What is ''cutter offset''? I should have asked this earlier. I'm not familiar with your CAM program, so maybe it's something you have to input when setting up.
When doing a layout, what I plug into the CAM program is the 0,0,0 point for the work envelope of the layout, cut width, and the actual tool diameter. Then when the G-code compiles, the cut path is set. All I have to do at the machine is set the work 0,0,0 point in the DRO and press Go. Mach3 has a strange setup for the work coordinates as opposed to the machine coordinates. I never really did figure that one out. IMHO, on a mill they should be the same, and you should be able to set them anywhere you want. But I don't have a lot of experience with Mach3 so maybe it's just my lack of experience.
Regarding cut width, sometimes I make the cut width > than the tool diameter so that it will make 2 passes around the profile, the final pass as a cleanup or spring cut. Normally ~ 0.005. For instance, if my cutter is 0.250, I'll set the cut width at 0.255 to give me a cleanup of 0.005 all around. So the first pass would theoretically make the part 0.010 oversize.