You guys eyes must be better then mine, I can't see a .30 hole at 100 yards let alone 500. And if you are shooting iron sites at 500 good luck. I have tried high power silhouette a few times, but the targets fall over.
I think we are missing some facts here, what caliber, size of target, type of target...you said steel, is it mild and you poking holes in it or AR(whatever) steel. More info might help out a bit.
I am not trying to see a hole at 400 yards.
I am not shooting iron sites at 500 yards.
We shoot various size calibers at steel targets.
Rarely will a bullet punch all the way thru but it sure makes it swing.
I want to make that swing (thus a hit) more apparent with the naked eye.
IE:
-Triggers a flag to swing
-Trips a red light to turn on
-Jaotguys suggestion of making the target tip down and back up like the toy drinking bird.